Australian Court Ruling Could Unlock $640 Million in Bitcoin Tax Refunds
An Australian court ruling may impact how Bitcoin is taxed in the country, potentially bringing about a capital gains tax (CGT) refund of up to $640 million. This development arose from a criminal proceeding against William Wheatley, a former federal police officer who allegedly stole 81.6 Bitcoins in 2019.
According to Judge Michael O’Connell of Victoria, Bitcoin should be classified as money for Australian legal purposes, similar to Australian dollars, rather than being deemed property like shares or gold. This legal analysis contradicts the Australian Taxation Office position, which has maintained since 2014 that cryptocurrencies are taxable and subject to capital gains tax when they’re sold, traded, or used to make purchases.
The ruling challenges this framework by stating that the nature of Bitcoin is more like a currency than property. Tax lawyer Adrian Cartland commented that this judgment significantly departs from the ATO’s position, noting that if Bitcoin is money, its acquisition and disposal would not create a taxable event.
If upheld on appeal, Cartland believes Australian taxpayers may be entitled to refunds totaling roughly 1 billion Australian dollars (around $640 million USD) for past Bitcoin purchases. The ATO has yet to provide a formal estimate of the ruling’s potential impact.
The case involved Wheatley allegedly stealing Bitcoin from a seized wallet linked to a 2019 drug trafficking investigation. At the time of theft, the stolen Bitcoin was worth about $500,000, which later increased to more than $13 million. The defense argued that Bitcoin has no physical form and is simply digital information, so it cannot be stolen. The court ruled Bitcoin is an intangible property that acts like money.
This judgment reflects how legal systems are gradually accepting Bitcoin and other cryptocurrencies and recognizing their growing importance. If courts maintain this interpretation, it could affect regulatory frameworks and financial markets, potentially treating Bitcoin as currency rather than an investment asset.
For Australian crypto users, the uncertainty caused by this decision is significant, as the ATO is likely to appeal and tax treatment of Bitcoin remains unclear. Meanwhile, millions of Australians holding cryptocurrency are seeking clarity on how their assets will be taxed.
This ruling is part of a global conversation on how best to classify and regulate digital assets as jurisdictions worldwide update tax and legal frameworks to keep pace with rapid technological change.
