The Australian Tax Office (ATO) has sent out warning letters to investors who have placed the majority of their retirement savings in cryptocurrencies.
As part of an ATO effort to warn against high-risk retirement investment strategies, 18,000 holders of Self-Managed Super Funds (SMSFs), a type of retirement account privately managed by individuals, were told they face penalties up to 4,200 AUD for breaching regulations, according to local media reports.
While the letter targeted any SMSF holder with over 90 percent of their retirement savings in a single asset – primarily in property – the ATO also singled out cryptocurrencies as a high-risk investment.
“We have already seen two instances of SMSFs losing significant amounts of their retirement savings through investment in cryptocurrency,” an ATO spokesperson told the Australian news site Micky.
To be clear, it’s not the asset class itself the agency warns against, but being highly overexposed in any one asset.
The Australian Securities and Investments Commission (ASIC) takes a similar line:
“Be wary of services offering to establish an SMSF for you in order to gain exposure to cryptocurrencies. Not only does operating an SMSF involve significant time, skills and responsibility, you may also be putting your retirement savings at risk.”
Neither the ATO or ASIC responded to requests for comment by press time.
Notably, the U.S. Internal Revenue Service (IRS) sent a round of letters to crypto investors this week.
Australian Taxation Office image via Shutterstock
https://www.coindesk.com/all-crypto-retirement-accounts-will-be-fined-australian-tax-office
