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Binance Australia partners with Koinly for tax reports as ATO ramps up compliance

The taxman commeth for Australian crypto investors and Binance wants to help them out.

The Australian branch of leading cryptocurrency exchange Binance has increased the ability for users to accurately report tax liabilities amidst increased pressure from local tax authorities.

Binance has partnered with cryptocurrency tax startup Koinly to assist users grappling with ever-increasing tax obligations down under. Binance users in Australia have been offered access to Koinly’s tax reporting solution through the integration.

Koinly was founded in 2018 and supports over 600 exchanges and wallets, enabling users to sync their full crypto trading history with one central ATO-compliant platform.

The move comes as the Australian Tax Office (ATO) increases its effort to collect taxes on cryptocurrency gains. In July last year, the ATO targeted 350,000 crypto asset investors and holders with a letter regarding undeclared cryptocurrency gains.

In May 2021, the ATO doubled down with its efforts, reminding 100,000 Australian crypto users to report all gains on their tax returns — with a further 300,000 people expected to be prompted to do so as they lodge their returns. It estimated that there are over 600,000 taxpayers that have invested in crypto-assets in recent years. The ATO uses data matching with exchanges to identify users who may have tax bills.

In an announcement shared with Cointelegraph, Koinly founder Robin Singh explained:

“The ATO is collecting bulk records data from Australian crypto exchanges and comparing it to amounts entered on previous tax returns. Failure to declare crypto gains can attract a penalty of 75% of the outstanding tax liability.”

Binance is also increasing its educational efforts down under by hosting an end of financial year tax masterclass in collaboration with Koinly on July 22.

Related: Two-fifths of Aussie millennials think crypto investments beat real estate

Sam Teoh, of Binance Australia, stated that the crypto community has voiced their concern around tax compliance, adding “with approximately one in six Australians investing in crypto, taxpayers and tax agents alike are on a steep learning curve.”

Australians are not the only ones coming under the watchful eye of the taxman. In late May, the U.S. Treasury proposed crypto transactions over $10,000 be reported to the Internal Revenue Service.

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ASX sounds crypto exchange custody warning, calls for better regulations

The Australia Securities Exchange says crypto investors in the country need to be mindful of the dangers of holding their cryptocurrencies on exchange platforms.

The Australia Securities Exchange (ASX) has weighed in on the issue of crypto custody amid the ongoing discussions within the country’s Senate Select Committee on Financial Regulatory Technology.

In a submission to the committee on July 16, ASX highlighted crypto custody on centralized exchanges as a significant risk factor for investors.

The ASX submission outlined the implications of crypto exchange custody arguing that investors do not have access to their private keys while their funds are domiciled in these platforms — another way of saying “not your keys, not your coins.”

According to the ASX, crypto funds left on exchange wallets are vulnerable to cybersecurity risks in the form of theft by hackers. Crypto exchange hacks used to be a regular occurrence in times past with over $53 billion worth of virtual currencies stolen from platforms between 2011 and 2020.

Related: Senator warns lack of regulations could harm Australian crypto innovation

However, improved security measures on exchanges have stemmed the tide of these thefts significantly but the odd exchange hack still happens every so often.

Apart from cybersecurity problems, the ASX submission to the Senate committee also stated that investors who chose crypto exchange custody run the risk of their funds being handled in an undisclosed or unauthorized manner.

While noting that cybersecurity risks are not unique to crypto exchanges alone, the ASX outlined measures such as regulation, appropriate asset capitalization, and insurance as quality assurance protocols imbibed by legacy asset custodians.

As part of its submission to the committee, the ASX called for disclosure requirements for crypto exchanges as well as independent assurance protocols to better safeguard assets on their platforms. The securities exchange also recommended the introduction of core standards for digital asset custody services.

Given the absence of clear-cut crypto regulations in Australia, the ASX advised that such measures be included in a broader cryptocurrency regulatory framework for the country.

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Australian digital finance industry wants to legally recognize DAOs

A new legal initiative in Australia wants to allow DAO project governors to contract with other legal entities through DeFi tools.

Specialists and lawyers focused on decentralized finance (DeFi) are launching an initiative to create a new type of legal entity in Australia representing decentralized autonomous organizations (DAOs).

The country's Digital Law Association and global law firm Herbert Smith Freehills are lobbying an Australian Senate committee to formally recognize new decentralized models for corporate governance. These new DAO models would replace the board of directors with an internet community, the Australian Financial Review reported Thursday.

The initiative specifically intends to allow “DAO Limited” project governors to contract with other legal entities through DeFi tools implementing blockchain technology to remove traditional intermediaries like banks and exchanges. Limited liability status will also prevent Australian members of a DAO from being liable for losses incurred by decisions made by a member of the community.

According to the lawyers, legalizing DAOs in Australia could make the country more attractive for global digital asset businesses as groups of local DeFi entrepreneurs reportedly shift offshore to jurisdictions like Singapore and Germany.

Related: Wyoming legally recognizes first DAO in the United States

A DAO is a decentralized organization with certain sets of rules that are encoded as a computer program and are usually based on blockchain technology. The first most important attempt to create a DAO was “The DAO,” a machine-operating venture organization launched in 2016.

The news comes as some cryptocurrency exchanges shifting to a decentralized structure. Yesterday, ShapeShift crypto exchange announced plans to open-source its platform and dissolve its entire corporate structure in a move to underscore its commitment to DeFi. “Inspired by the broader DeFi community, we’ll now help pioneer a new model of economic coordination for the 21st century. No corporate entity, no banks and no borders. The tools are ready,” ShapeShift founder and CEO Erik Voorhees said.

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Visa to approve Bitcoin spending card for Australian startup CryptoSpend

Crypto debit cards continue to catch on as an Australian digital assets start-up gets approval from Visa to release a spending card down under.

Global payment giant Visa is moving forward with its commitment to digital currency adoption by approving the issuance of a new Bitcoin (BTC) debit card in Australia.

Sydney-based crypto spending app CryptoSpend announced Wednesday that Visa has approved the issuance of a physical debit card that will allow Australians to spend their Bitcoin at local merchants.

CryptoSpend co-founders said in an interview with the Australian Financial Review that the new card will be issued by major local payments company Novatti and is expected to hit the market in September. Visa is expected to announce the approval later this week.

According to the report, the upcoming crypto debit card will allow users to spend a set of major cryptocurrencies including Bicoin, Ether (ETH), XRP, and Bitcoin Cash (BCH). Users’ crypto holdings will be custodied by BitGo.

CryptoSpend co-founder Andrew Grech said that the card will give Australians a way to cash out their Bitcoin profits as opposed to selling the cryptocurrency, stating:

“Spending it directly is a more convenient way of selling it. If the market is green, someone could say it’s time to spend some of my profits. On the other side of the fence, another person might say it’s going to keep going up, I’ll hold onto it. But we have seen more spending volume when the price is going up.”

Related: Visa reports over $1 billion in crypto spending in H1 2021

According to the Financial Review, Visa has already approved the issuance of crypto spending cards in Australia for some global crypto exchanges like Binance, but they are not yet available in the country. Crypto exchange Crypto.com also received approval to be a direct issuer of Visa debit cards in Australia and is preparing to launch a card soon.

Visa did not immediately respond to Cointelegraph’s request for comment.

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Bitcoin Will Eventually Be Transacted More Than Fiat Currency, Say 35% of Australians Surveyed

Bitcoin Will Eventually Be Transacted More Than Fiat Currency, Say 35% of Australians SurveyedA new survey finds that 35% of Australians believe bitcoin will eventually be transacted more than fiat currency. Almost the same number of respondents believe that bitcoin “has a significant role to play in the future of currency.” Comparison platform Finder published Tuesday the results of a cryptocurrency survey, which it described as a “nationally […]

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Australian government awards $4M in grants to two blockchain startups

The new investment aims to explore blockchain’s capability to expand the competitiveness of Australia’s critical minerals and food and beverage industries.

Australia’s Minister for Industry, Science and Technology announced 5.6 million Australian dollars ($4.2 million) in grants to two blockchain-focused companies including traceability firm Everledger and technology consulting startup Convergence.tech.

Everledger, a company focused on building a global registry for diamonds, has received 3 million AUD ($2.2 million) to investigate blockchain technology’s use cases for creating digital certifications for critical minerals through the extraction and movement phases. As previously reported, the firm was deploying blockchain tech by software giant IBM for a transparency platform for the diamond industry.

Covergence.tech received $2.6 AUD ($2 million) to apply blockchain technology for automatic reporting processes under a system for commodity-based tax on goods like beer and spirits. “This will help companies in the sector to reduce compliance costs associated with the creation, storage and transportation of their products,” the announcement reads.

Provided as part of Australia’s “Blockchain Pilot Grants” program funded by the Morrison Government, the new investment aims to explore blockchain’s capability to expand the competitiveness of Australia’s critical minerals and food and beverage industries. Minister Christian Porter said that the projects will accelerate the pace of blockchain adoption in Australia as well as assist businesses in solving real-world challenges.

Related: Aussie state government blockchain platform may prevent a tower block inferno

“The Blockchain Pilot Grants will demonstrate the potential for blockchain to help businesses to save money and cut red tape by improving processes such as tracking products throughout the supply chain and transferring customer information,” Porter noted. The new grants build on Australia’s national blockchain roadmap announced in 2019.

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Australian online broker SelfWealth to offer crypto trading

SelfWealth’s move into crypto investment falls in line with the company’s efforts to shift from a pure share trading platform to a “wealth creation platform”.

SelfWealth, a share trading platform listed on the Australian Securities Exchange, is planning to offer cryptocurrency trading as part of its 2021 roadmap.

On Monday, SelfWealth officially announced that the company will partner with an “established and secure cryptocurrency exchange” to offer crypto trading on its platform.

“This is off the back of research we’ve done, including answers from many of you. You want to access crypto, but you want it done in a safe and secure manner. You will be able to trade cryptocurrencies that have been vetted by us first,” SelfWealth wrote.

SelfWealth’s move into crypto investment comes amid the company’s transition efforts from a pure share trading platform to a “wealth creation platform,” the firm noted.

According to a report by the Australian Financial Review, SelfWealth intends to support up to 10 major cryptocurrencies including Bitcoin (BTC) and Ether (ETH) by the end of the year. 

“Australians have decided that cryptocurrency is here to stay and are looking for trusted platforms to facilitate their investment decisions,” SelfWealth chief executive Cath Whitaker said.

Related: Investment app Betterment looking into long-term crypto offering, says CEO

The announcement comes shortly after SelfWealth released a survey of 3,500 customers which found that 30% of respondents have already invested in crypto. Another 38% reportedly indicated that they were planning to invest in digital assets.

Australia has been steadily emerging as a major crypto-friendly jurisdiction as the country’s major financial regulator, the Australian Securities and Investments Commission, took a supportive stance on developing the local crypto industry. The authority is now seeking public feedback on crypto-asset exchange-traded products, stating that it is aware of growing demand for them in Australian markets.

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Australian Regulator Seeks Advice on Crypto-Related Assets

Australian Regulator Seeks Advice on Crypto-Related AssetsThe Australian Securities and Investments Commission (ASIC) recently opened a consultation for establishing methods and best practices for regulating crypto assets. The consultation paper seeks guidance on which crypto-assets should qualify as underlying assets, and how to make this determination. The proposal could signal the emergence of new crypto-based products in the Australian market. Australian […]

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Australian regulators seek public input on crypto ETPs

The Australia Securities and Investments Commission has indicated that Bitcoin and Ether are the only two crypto assets likely to meet its evolving criteria for a regulated crypto ETP.

The Australia Securities and Investments Commission (ASIC) is seeking public feedback on on crypto-asset exchange-traded products (ETPs), stating that it is aware of rising interest and demand in their launch on regulated Australian markets.

In a consultation paper released June 30, the regulator said its top priority was to assess whether the “unique and ever evolving features” of crypto-asset ETPs could meet existing regulatory obligations in a consistent fashion. Given this complexity and the fast pace of change in the industry, ASIC notes it deems it necessary to consult widely in order to assess the two key issues at stake:

“(a) whether these products can meet existing expectations for ETPs, including whether crypto-assets are appropriate underlying assets, whether crypto-assets can be reliably priced, and how crypto-assets should be classified with respect to underlying asset rules; and (b) how product issuers can ensure these products are compliant with our regulatory framework, including with respect to custody, risk management and disclosure.”

ASIC's paper indicates that the regulator does not consider that all crypto assets are currently able to serve as appropriate underlying assets for an ETP, taking into account its assessment of the maturity of the industry's spot and the level of regulation of its futures market. However, the regulator is open to approving a crypto asset ETP that could meet all its relevant assessment criteria. Here, the regulator notes:

"At this point in time, in our view, the only crypto-assets that are likely to satisfy these factors are bitcoin (BTC) and ether (ETH)."

ASIC's initiative appears to have been galvanized both by the recent listing of an Ethereum ETP on the Toronto Stock Exchange — something that ASIC explicitly notes in its paper — and ongoing considerations by the Australian Securities Exchange (ASX) of several crypto ETP applications.

In recent months, ASIC has become increasingly proactive in reaching out to domestic blockchain and crypto firms and has been attempting to build trust and collaborate with the crypto economy. The regulator has, however, received criticism from some of these firms for the perceived opacity of existing regulations and crypto companies' compliance obligations.

In its statement, ASIC stresses that the way in which crypto assets themselves are classified and regulated in Australia is a question for the government. The Senate Select Committee on Australia has been assessing options for the development of a comprehensive regulatory framework for crypto and digital assets, and ASIC emphasizes that its paper does “not seek to pre-determine any decision the Committee may make.”

Related: VanEck and BetaShares apply for Aussie crypto ETFs as family offices snap up BTC

Feedback from the public will need to be submitted to ASIC by July 27. Respondents can choose to submit their responses openly, anonymously or using an alias. 

Speaking with Cointelegraph, BetaShares founder and CEO Alex Vynokur addressed ASIC's consultation question as to whether it would be appropriate to offer retail investors exposure to crypto assets underlying ETPs through a licensed Australian market. Vynokur said that BetaShares, as a local provider of ETP's and other ASX-traded funds, holds the view that this approach would offer consumers better protection than direct access through exchanges.

Vynokur also agreed with the proposal that regulated investment products like ETPs should be limited to a “small subset of crypto-assets, that can demonstrate robust liquidity, transparency and price discovery.”

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Lloyds Auctions Australia Sells a Pricey Caravan for Cryptocurrency

Lloyds Auctions Australia Sells a Pricey Caravan for CryptocurrencyAustralia’s Lloyds Auctions now accepts major cryptocurrencies for any of the items offered on its marketplace. Within hours of the announcement, the auction house managed to sell an expensive caravan (camper/trailer) to a bidder who was happy to pay the full price with digital coins. Australian Auction House Lloyds Auctions Accepts Crypto From Bidders Against […]

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