Key Takeaways
- The ruling came as part of criminal proceedings involving former federal police officer William Wheatley, who is accused of stealing 81.6 BTC from a confiscated wallet linked to a 2019 drug trafficking probe
- Judge Michael O’Connell noted that Bitcoin holds enough characteristics of currency to be considered a form of money under Australian law.
A recent judgment made by a court in Australia has widespread implications for crypto transactions in the country. As per an Australian Financial Review report, a judge ruled that crypto should be viewed as money instead of as a taxable asset, leading to a potential $640 million in capital gains tax (CGT) refunds on Bitcoin transactions
The ruling came as part of criminal proceedings involving former federal police officer William Wheatley, who is accused of stealing 81.6 BTC from a confiscated wallet linked to a 2019 drug trafficking probe
At the time of the alleged theft, the Bitcoin was worth around $492,000 but the value has now surged upto $13 million.
As per AFR, Judge Michael O’Connell noted that Bitcoin holds enough characteristics of currency to be considered a form of money under Australian law. He further added that while crypto assets have been involved in court-ordered seizures and family law disputes, the legal classification of these assets has not been definitively resolved in the context of criminal law—until now.
The defense argued that Bitcoin is not tangible property but rather digital information. Cartland, one of the defense barristers, stated that Bitcoin is essentially a software entry and should not be classified as a stolen item under traditional definitions of property.
Judge O’Connell disagreed, stating that Bitcoin qualifies as “other intangible property” and has reached a level of functionality similar to fiat money.
The ruling challenges the interpretation held by the Australian Taxation Office (ATO), which has treated cryptocurrencies as CGT assets since 2014. This position required taxpayers to declare gains or losses whenever they sold, exchanged, or used digital currencies.
Tax barrister Adrian Cartland, who represented Wheatley, said the judgment undermines that approach. According to Cartland, recognizing Bitcoin as money means it is not a CGT asset, and any buying or selling of Bitcoin should fall outside the scope of capital gains tax laws. He estimated that up to A$1 billion in crypto-related taxes may be impacted, though the ATO stated it has no official data on how much tax revenue is at stake.
The case applies specifically to Bitcoin and only affects transactions from 2019 onward. While it does not automatically alter ATO policy, it introduces legal uncertainty around the treatment of crypto holdings by Australian investors.
Prosecutors from the National Anti-Corruption Commission allege that Wheatley accessed a seized wallet during an investigation and transferred the Bitcoin for personal use. His defense team maintains that because Bitcoin is software-based and intangible, the legal definition of theft may not apply.
The magistrate, however, ruled that Bitcoin meets the threshold of being property for legal purposes. While the court’s decision only applies to the criminal charges in this case, the classification of Bitcoin as money—rather than property—has opened the door for broader tax policy challenges.
Wheatley has filed an appeal against the ruling. A hearing is expected later this year. More than 1.9 million Australians currently hold crypto assets, according to the ATO. While the agency has long maintained that crypto is taxable, it acknowledged in a statement that tax treatment depends on how the assets are acquired, used, and sold.
