Losses in crypto investments for SMSFs

Navigating Cryptocurrency Investments in SMSFs

Understanding Risks and Safeguards

Over the last few income years, the ATO has seen some instances of SMSF trustees losing their crypto asset investments.

These losses have been caused by:

  • crypto scams, where trustees were conned into investing their superannuation benefits in a fake crypto exchange;
  • theft, where fraudsters would hack into trustees’ crypto accounts and steal all their crypto;
  • collapsed crypto trading platforms, many of which were based overseas; and
  • lost passwords, resulting in trustees being locked out of their crypto account and being unable to access their crypto.
  • Trustees thinking of investing in crypto need to be aware of the ways that crypto can be lost, including through scams, and how these scams can be avoided.

Many crypto assets are not commonly considered to be financial products, which means the platform where crypto is bought and sold may not be regulated by ASIC.

Therefore, trustees may not be protected if the platform fails or is hacked.  When a crypto platform fails they will most likely lose all of their crypto.

Investing in crypto can be complex and risky, and so the ATO recommends that trustees seek financial advice before investing.

Please contact our team in West Perth if you require assistance in relation to the above measure.

Superannuation is one of those areas that can be compared to a cart on a rollercoaster. Its performance is constantly affected by the economic climate and shifting legislation that alters the benefits individuals and businesses can gain from superannuation funds. Read more here about how Omnis Group can help.