ATO data collected to date indicates SMSF investments in cryptocurrencies are not at a significant level despite the continually increasing promotion of this asset class.
Speaking at the selfmanagedsuper SMSF Professionals Day 2022 held in Sydney on Tuesday, ATO SMSF approved auditor portfolio director Paul Delahunty revealed: “The investment by SMSFs in crypto has been fairly insignificant in recent years. The March 2020 statistical data [indicated] the total crypto investment is at just over $220 million, or in comparative terms, less than 0.03 per cent of all SMSF investment.
“This was reported by 3345 SMSFs, approximately 0.6 per cent of the population of SMSFs. The total assets held by these funds was $1.4 million, meaning that for the funds that did hold crypto, [the digital assets] made up less than 16 per cent of their asset holdings.”
However, Delahunty pointed out there are other factors in the data, apart from investment volume, that are prompting the interest of the regulator.
“Considering our statistics in greater depth, we have been able to see there was an increase in new [SMSF] registrants investing in crypto during 2020, with 4 per cent reporting crypto investment,” he said.
Further, he revealed the 2021 data, while still being finalised, has already led the ATO to expect similar growth in crypto investments by new registrants as well as within the greater SMSF population.
He suggested advisers need to acknowledge these trends even though the dollar amounts invested are still relatively low.
“There are a number of important aspects also for SMSF professionals to be contemplating about cryptocurrencies. [Namely] we’d like professionals to take note of the recent ASIC (Australian Securities and Investments Commission) advice,” he said.
“That is the trustees of an SMSF thinking about investing in crypto [being] strongly encouraged to seek independent financial advice before doing so.
“This is the case whether they’ve set up the fund themselves or used an SMSF [service provider] to help them.”