The AFR reports this morning that the Australian Tax Office (ATO) is seeking to better understand and in turn regulate and tax the activities of crypto-currencies such as Bitcoin within in its jurisdiction.
Crypto-currencies started out as libertarian projects to sit outside conventional economic structures. But because of the anonymity they gave financial transactions and those conducting them, they sit outside usual law enforcement and tax structures also. Indeed, the collapse of the Silk Road website after an FBI investigation brought the problems associated with this anonymity into sharp focus.
So it’s catch-up time for the ATO and its counterparts in other countries like the US Internal Revenue Service as they try to find a way not only to regulate but also “how to treat transactions, investments and income, as well as Bitcoin exchanges and mining,” according to the AFR. It says the ATO has invited local Bitcoin-related companies to discussions this week.
The problem of what exactly Bitcoin and other crypto-currencies are seems to be a globally stumbling block.
“It’s not outright a commodity or currency; it’s something new altogether, so how they approach this new vehicle, which hasn’t been seen before, it takes a bit of consideration as to whether any existing legislation outright applies to it,” Asher Tan, founder of Sydney-based company CoinJar told the AFR.
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