SMSF members looking to get cryptocurrency into their fund via a Regulation 13.22c unit trust are not prevented from doing so by specific ATO guidance, but a number of rules are likely to make it extremely difficult to do without encountering compliance and in-house asset issues, an audit specialist has stated.
ASF Audits head of technical Shelley Banton noted while it appeared a 13.22c unit trust could allow this kind of investment, its very structure created more hurdles than it removed.
“There is no ATO guidance out there so really the floor is open on this one, and a key question is whether cash held at the crypto-exchange is considered to be a non-authorised deposit-taking institution bank account. Technically it’s not a bank account, but that hasn’t been road tested by the ATO,” Banton told attendees today at Class Ignite 2025 in Sydney.
“There’s more information available on the ‘yes’ side of investing via a 13.22c trust because it’s not an interest in another entity since it’s a digital asset.
“The crypto has also not been owned by the entity three years before the SMSF bought into it because we’re talking about a new digital asset.
“So we may have some opportunity to invest in crypto through a 13.22c trust.”
However, Banton put a strong caveat on her statement, noting the information provided was to highlight the compliance issues with this type of crypto-investing.
“All of what I said comes with a massive warning. All of the rules for investing in a 13.22c entity apply equally to crypto,” she added.
“You need to consider whether the investment breaks the in-house asset rules, which means asking whether the entity is conducting a business. Is that 13.22c trust mining crypto? Alternately, is it staking the crypto – which is a loan?
“Can the fund borrow to buy more crypto either through cash or crypto itself? The answer is no.
“What about arm’s-length transactions? Who is on the other side of that transaction? Is it a related party and what about the rules about acquiring crypto from related parties?
“There are lots of things here which are going to trip you up in terms of going down this path given there is no guidance.
“Go and talk to the ATO, get specific advice through a private binding ruling or their specific advice channel because all the facts and circumstances are going to be relevant here.
“Realistically, the only thing you can do with crypto in a 13.22c unit trust at present is buy, hold and sell it. Anything else is going to bust the trust.”
