Can you withdraw cryptocurrency in Australia?

Highlights

• Australia and most other countries allow both the parking of funds in cryptos and the withdrawal of money at will
• Intermediaries like exchanges and ATMs provide withdrawal services, and some merchants also accept crypto payments
• Last year, many crypto intermediaries like Celsius and Voyager halted withdrawals when prices dropped sharply

Cryptocurrencies like Bitcoin (BTC) and Dogecoin (DOGE) have found backers over the past few years. In spite of underlying risks, including a sharp plunge in prices over a very short period, some people consider cryptos the next big thing. This has led many, especially youth, to park funds in cryptocurrencies and non-fungible tokens (NFTs), both based on the decentralised ledger or peer-to-peer record-keeping technology.

Once funds are parked in such assets, the backer can withdraw money either to book profits or avoid any further losses. The question is can you withdraw cryptocurrency funds locked in a wallet? What are the consequences of such withdrawals, and how can you be sure that you have followed all the rules mandated by the Australian Taxation Office (ATO)?

Let us quickly explore how cryptocurrency withdrawals work in the country.

Withdrawal of cryptocurrency in Australia

Many exchanges, including Binance and Coinbase, operate in Australia and provide crypto investment services. Most of these also have NFT trading platforms, where assets like Beeple’s artworks and CryptoPunks can be traded. One can also choose to hold a cryptocurrency in a cold wallet, outside of these exchanges. Crypto trading activity can take place on all days, including weekends. Besides, this can be done at any hour of the day or night.

Withdrawals are easy, meaning the held asset can be liquidated by using an intermediary’s services. The user can link a bank account, and the funds are usually received in Australian dollars (AUD). The country has cryptocurrency ATMs in some big cities like, Melbourne and Sydney. A small number of merchants like, OTR, which has convenience stores, also accept payments in crypto.

What after withdrawal?

The ATO says any withdrawal of funds gives rise to a capital gain tax (CGT) event. This means when a holder sells BTC or any altcoin, the profits booked fall under the ambit of taxes. If one cryptocurrency is exchanged for another, like ETH crypto is sold to acquire DOGE tokens, it also triggers a CGT event. The ATO clubs cryptocurrencies and NFTs under the ‘crypto asset’ classification.

Data provided by CoinMarketCap.com

Bottom line

Cryptocurrency assets can be liquidated in Australia using intermediaries’ services like an exchange or an ATM provider. That said, the failure of some intermediaries like FTX and Celsius shows that investors should always be careful in the crypto space. In 2022, a number of intermediaries halted withdrawals in the wake of a deeply bearish market, where prices of BTC and other assets dipped very sharply.

Risk Disclosure: Trading in cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory, or political events. The laws that apply to crypto products (and how a particular crypto product is regulated) may change. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading in the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Kalkine Media cannot and does not represent or guarantee that any of the information/data available here is accurate, reliable, current, complete or appropriate for your needs. Kalkine Media will not accept liability for any loss or damage as a result of your trading or your reliance on the information shared on this website.