The Australian Tax Administration (ATO) has sent warning letters to investors who keep most of their retirement savings in cryptocurrencies.
As part of the ATO initiative to prevent risky retirement investment strategies, 18,000 holders of SMSF, a privately owned retirement account, were warned of a fine of up to A $ 4,200 for breaking local laws.
Letters were sent to SMSF holders who invested more than 90% of pension savings in one asset. ATO also noted a high degree of risk of investment in cryptocurrencies.
“We have already witnessed two cases where SMSF holders lost significant amounts of retirement savings due to investments in cryptocurrency,” a representative of the Tax Administration said.
In general, ATO is not opposed to investing pension savings in cryptocurrencies, but warns against the risks of investing too much of a percentage of funds in one asset. The Australian Securities and Investments Commission (ASIC) has a similar position:
“Beware of the services that offer you to create an SMSF that provides access to cryptocurrencies. Working with SMSF requires not only considerable time, skills and responsibility, but also can be fraught with risk for pension savings. ”
Recall that recently the US Internal Revenue Service (IRS) began to harass traders for inaccurate information about cryptocurrency earnings. At the end of last month, it became known that the IRS sends out letters requesting the payment of taxes on cryptocurrency income.