Judge Declares Bitcoin Is “Money,” Challenging Longstanding Crypto Tax Rules
A recent court ruling in Australia may pave the way for up to 1 billion AUD ($640 million) in tax refunds for Bitcoin users after a judge reclassified Bitcoin as “money” rather than a taxable capital asset.
The decision was handed down in a criminal case involving former federal police officer William Wheatley, who allegedly stole 81.6 Bitcoin (BTC) during a 2019 investigation. At the time, the BTC was worth roughly $492,000; today, it is valued at over $13 million.
In his judgment, Judge Michael O’Connell of the County Court of Victoria stated that Bitcoin should be treated more like Australian currency and not like shares, gold, or foreign exchange assets, which are currently subject to capital gains tax (CGT).
Potential Landmark for Crypto Tax Reform in Australia
The ruling could significantly disrupt the Australian Taxation Office (ATO)’s long-standing position on crypto. Since 2014, the ATO has treated Bitcoin and other cryptocurrencies as CGT assets, meaning that any disposal — whether through sale, trade, or use in payments — constitutes a taxable event.
But this interpretation is now under scrutiny.
“It was held that Bitcoin is Australian money. That is, it is not a CGT asset,” said tax lawyer Adrian Cartland in an interview with the Australian Financial Review (AFR). “Therefore, acquisitions and disposals of Bitcoin have no tax consequences.”
Cartland believes the ruling “totally upends” the ATO’s crypto tax framework and could unlock a wave of refund claims from individuals and businesses that have paid CGT on Bitcoin transactions over the years.
$640 Million in Potential Tax Refunds — If Upheld
Cartland estimates that if the ruling survives appeal, as much as 1 billion AUD ($640 million) could be claimed in capital gains tax refunds. That figure includes past taxes collected under the current ATO guidelines for Bitcoin and crypto asset disposals.
The ATO, however, said there is currently no official confirmation of how much might be refunded or whether the ruling would indeed alter the tax treatment of crypto at a national level.
If upheld, the ruling could set a powerful legal precedent, potentially prompting parliamentary review or legislative change to clarify the status of crypto assets in Australia’s tax code.
Final Thoughts: Legal Uncertainty Breeds Hope for Bitcoin Holders
The unexpected ruling has opened the door to massive implications for Australian crypto investors, tax professionals, and regulatory bodies. While the decision was made in a criminal case, its interpretation of Bitcoin as “money” could fuel challenges to current tax obligations on digital asset trading and usage.
Still, with the potential for appeal and likely government pushback, crypto holders should tread carefully — and consult with professionals before pursuing any refunds. Yet for many, this ruling may represent a turning point in crypto’s legal treatment in Australia — from taxable asset to recognized form of digital money.
