Last month, the Australian Tax Office published a notice detailing its latest data collection and surveillance requirements for crypto designated service providers in Australia. Specifically, the ATO will acquire account identification and transaction data from crypto designated service providers for the 2023-24 financial year through to the 2025-26 financial year inclusively. The data items include: client identification details (names, addresses, date of birth, phone numbers, social media account and email addresses) and transaction details (bank account details, wallet addresses, transaction dates, transaction time, transaction type, deposits, withdrawals, transaction quantities and coin type). It estimates that records relating to approximately 700,000 to 1,200,000 individuals and entities will be obtained each financial year.

The latest requirements follow from the ATO’s existing data-matching program, which was introduced in 2019. This program involves the ATO collecting ‘bulk records’ of purchase and sale information from cryptocurrency designated service providers.

It is understood that the impetus behind the ATO’s latest requirement lies in the growing concern that individuals have been evading capital gains tax liabilities. Under Australian law, crypto assets are treated as capital gains tax assets, and the ATO recognizes that the “innovative and complex nature of crypto can lead to a genuine lack of awareness of the tax obligations associated with these activities”.

In the context of Australia’s regulatory framework, businesses providing Digital Currency Exchange services already have reporting obligations to the Australian Transaction Reports and Analysis Centre (AUSTRAC) under the anti-money laundering and counter-terrorism financing (AML/CTF) regime. This measure will add to the existing data collection responsibilities of these crypto currency exchanges.

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