Can You Use Cryptocurrency in Your Self-Managed Super Fund (SMSF)?

  • 12 May 2025
  • 2 min read
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Cryptocurrency has become an increasingly popular investment, and many consumers are now considering adding digital assets like Bitcoin and Ethereum to their self-managed super funds (SMSF). But is it possible- and is it compliant with regulations? Here’s what you need to know in 2025.

Is Cryptocurrency Allowed in an SMSF?

Yes, Australian SMSFs can legally invest in cryptocurrencies such as Bitcoin and other digital assets. However, there are strict regulatory and compliance requirements that must be met for these investments to be valid and compliant with the Australian Taxation Office (ATO) and the Superannuation Industry (Supervision) Act 1993 (SIS Act). 

Key Requirements for SMSF Crypto Investments

To ensure your SMSF’s cryptocurrency investments are compliant, you must;

  • Check Your Trust Deed and Investment Strategy – The SMSF’s trust deed must explicitly allow for crypto investments, and the fund’s investment strategy must outline why and how digital assets fit within the fund’s risk profile and objectives. 
  • Register and Structure Properly – The SMSF must be registered with the ATO and have a valid Australian Business Number (ABN) and Tax File Number (TFN), along with a dedicated bank account for all fund transactions.
  • Maintain Clear Separation – Cryptocurrencies must be held in accounts or wallets registered in the SMSF’s name, not in the names of the individual trustees or members. Mixing personal and find assets is strictly prohibited. 
  • Use Approved Platforms – All crypto transactions must occur through regulated, AUSTRAC-registered exchanges that comply with Anti-Money Laundering and Counter Terrorism Financing (AML/CTF) rules. 
  • Keep Detailed Records – Trustees must maintain comprehensive records, including wallet addresses, transaction IDs, and valuation documents. This is crucial for both compliance and annual audits. 
  • Avoid Related Party Transactions – SMSFs cannot acquire crypto assets from related parties or transfer personal crypto holdings into the fund.

Limits and Restrictions

  • Portfolio Allocation – While there is no fixed cap on how much crypto an SMSF can hold, the ATO requires that in-house assets (including crypto) do not exceed 5% of the fund’s total market value. In practice, most SMSFs allocate between 2.4% and 4% to crypto, with new funds sometimes going as high as 7%.
  • Banned Activities – SMSFs cannot invest in crypto derivatives, and most derivative exchanges are not approved under the SIS Act. Every crypto investment must pass the “sole purpose test”, meaning it must be made solely for providing retirement benefits to members.

How to Hold SMSF Crypto Assets

  • Exchange Wallets – Many Australian exchanges offer SMSF-specific accounts and wallets, ensuring compliance and security.

  • Cold Wallets – SMSFs can use hardware wallets, provided they are dedicated solely to the fund’s assets and not mixed with personal holdings.
  • Custodial Solutions – Some SMSF administrators partner with specific eschnages or custodians for secure storage. 

Tax Implications

  • Capital Gains Tax (CGT) – SMSFs pay a flat 15% CGT on crypto gains, with a one-third discount if the asset is held for more than 12 months. 
  • Record-Keeping – All crypto transactions must be meticulously documented for tax reporting and auditing purposes.

Getting Started: Steps to Invest in Crypto with Your SMSF

  1. Confirm your SMSF’s trust deed and investment strategy allow for crypto investments. 
  2. Register your SMSF with the ATO and set up a dedicated bank account. 
  3. Choose an AUSTRAC-registered crypto exchange that supports SMSF accounts.
  4. Set up a separate SMSF trading account and wallet.
  5. Maintain strict records of all transactions and valuations. 
  6. Consult a financial adviser or SMSF specialist to ensure ongoing compliance. 

Conculsion

Australian SMSFs can invest in cryptocurrencies, but trustees must navigate a complex regulatory landscape. Strict rules apply to how to crypto is acquired, stored, and reported, and compliance with ATO regulations is essential. With careful planning and professional advice, SMSFs can safely incorporate digital assets into their retirement strategies, unlocking new opportunities for growth and diversification in the process. 

For tailored advice, always consult a licensed SMSF professional or financial adviser.