Australian court rules BTC is a form of money

The Federal Court of Australia, presided over by Justice Mark Moshinsky, has made a significant decision that could change the country's approach to bitcoin taxation.

The plaintiff, crypto investor David Keil, challenged the Australian Taxation Office's (ATO) approach, which treats bitcoin as property subject to Capital Gains Tax (CGT) at rates of up to 45%. Keil argued that bitcoin should be classified as a medium of exchange and a unit of account, i.e. a form of money, rather than an investment asset. The judge agreed.

"Because Bitcoin has the characteristics of a currency, such as a medium of exchange and a unit of account, it is simply another form of money. This means that Bitcoin can be exempt from capital gains tax," Moshinsky said.

Under current Australian tax law, CGT does not apply to money if it is used as a medium of exchange and not as an object of speculation. The court noted that Bitcoin functions as money in economic theory, the ATO did not provide sufficient grounds for classifying it as a non-monetary asset, so applying CGT to BTC transactions may be unlawful, this was the first federal decision to recognize Bitcoin as a form of money, which opens the way for a review of tax liabilities for past years.

Earlier, the Australian Transaction Reports and Analysis Centre (AUSTRAC) imposed sanctions against local crypto exchange Cointree for violating anti-money laundering and counter-terrorism financing (AML/CTF) regulations.