Historic Australian Court Ruling: Bitcoin Considered Money, Could Trigger $640 Million Tax Refund
A landmark Australian court decision has opened up the possibility of up to $640 million in tax refunds for Bitcoin-related transactions, after a judge declared that the digital asset should be treated as “money” rather than “taxable property.” The ruling has the potential to upend the country’s decade-old cryptocurrency tax system.
Bitcoin is money, not property – shocking ruling
The case stems from a criminal charge against federal police officer William Wheatley, who is suspected of misappropriating 81.6 BTC from an investigation in 2019. Victorian Court of Justice Michael O'Connell made a surprising ruling: Bitcoin should be treated as "a form of money", similar to the Australian dollar, rather than being lumped together with assets such as shares, gold or foreign currencies.
The ruling could become a legal precedent, making a series of previous Bitcoin transactions no longer subject to capital gains tax (CGT), according to tax lawyer Adrian Cartland. "If Bitcoin is money, it is not a CGT asset. Buying and selling Bitcoin will not have tax consequences," Cartland explained to the Australian Financial Review.
Direct challenge to ATO tax policy
The ruling is in stark contrast to the longstanding position of the Australian Taxation Office (ATO), which has treated cryptocurrencies as CGT assets since 2014. Under current guidance, any action – such as selling Bitcoin for fiat, converting it to another cryptocurrency, or using it to buy goods – is considered a taxable event.
The ATO has not commented formally on the potential for a tax refund, but Cartland estimates that if the ruling is upheld on appeal, the total refund could be as much as A$1 billion – or $640 million.
Comparing the global cryptocurrency tax framework
The Australian ruling comes as countries continue to adjust their approach to cryptocurrency taxation. In the US, the Internal Revenue Service (IRS) maintains its classification of cryptocurrencies as taxable assets, with strict rules on transaction reporting starting in 2025 – including a new 1099-DA form and a wallet-by-wallet accounting method.
Meanwhile, many countries are becoming “tax havens” for cryptocurrencies. Switzerland exempts capital gains tax on cryptocurrencies at the federal level, while Portugal, Malta, and the UAE impose minimal or zero tax on long-term holdings.
Widespread impact on the financial system
Recognizing Bitcoin as money could cause profound changes in the way traditional financial institutions approach digital assets. Previously, many banks in the UK and other countries have restricted or blocked transactions involving Bitcoin on risk management grounds. However, if BTC is considered a currency – equivalent to a foreign currency – these institutions may be forced to change their approach and service offerings accordingly.
In addition, large companies are increasingly integrating Bitcoin into their treasury strategies. According to BTC Network, a change in accounting standards expected by the end of 2025 will allow companies to recognize Bitcoin at its fair market value, rather than classifying it as an “unidentified intangible asset.”
Future Implications: Currency or Digital Asset?
If upheld, the Australian court’s ruling could change the landscape not only for taxation, but also for how countries view Bitcoin’s role in the modern financial system. It opens up a major debate about the line between “money” and “digital asset,” as countries like El Salvador have recognized Bitcoin as legal tender and many others are developing central bank digital currencies (CBDCs).
In the short term, Bitcoin users in Australia will face tax uncertainty, as well as the possibility of claiming tax refunds for transactions dating back to 2014. However, the ATO is likely to appeal, leading to a lengthy and complex legal battle that is being closely watched by global investors as an indicator of the future of cryptocurrency regulation.