The short answer
The ATO treats crypto assets as CGT assets. A CGT event happens on disposal, and disposal includes exchanging one crypto asset for another — not only selling for Australian dollars.
That single point produces most Australian crypto tax errors. A holder who never converted to AUD and believes nothing taxable occurred may have had hundreds of CGT events.
Capital proceeds are the market value in Australian dollars of what you received at the time of the event. Cost base is what you paid in Australian dollars plus certain incidental costs. Where an asset has been held for at least 12 months, the CGT discount may be available to individuals, reducing the taxable portion of the gain.
The events that catch people
Crypto to crypto. Exchanging token A for token B disposes of A. Proceeds are the AUD market value of B at that moment. The fact that no fiat moved is irrelevant.
Stablecoin conversions. Converting to a stablecoin is a disposal of the asset given up. Stablecoins are not treated as cash for this purpose.
Spending crypto. Using crypto to pay for goods or services is a disposal at market value.
Gifting. Transferring an asset to another person is a CGT event, with market value substituted for proceeds where the parties are not dealing at arm's length.
Not events: transfers between wallets or accounts you own, where beneficial ownership does not change. The records proving that are what distinguish a transfer from a disposal in the eyes of a reviewer.
Wrapping and bridging
The ATO has expressed the view that wrapping a token — exchanging it for a wrapped version — is a CGT event, on the basis that one asset is exchanged for a different asset, and that this holds even where the wrapped token tracks the original one-for-one.
This position has been contested by parts of the industry, and it produces outcomes that many users find counter-intuitive: a taxable event arising from a step taken purely to move an asset between environments, with no economic change and no proceeds available to fund the tax.
The practical position for a taxpayer is that the ATO's stated view is the starting point. Departing from it is a position to take deliberately, with advice and documentation, not by default because the outcome is unwelcome. Bridging arrangements should be analysed on the same basis, by reference to what actually happens to the asset.
The personal use asset trap
Capital gains on personal use assets acquired for less than a specified threshold amount can be disregarded. Some taxpayers reach for this in relation to crypto.
The ATO's guidance treats the exemption as narrow here. The relevant question is the purpose of the acquisition and the use of the asset, assessed at the time of disposal — and crypto acquired and held as an investment, or acquired to facilitate investment, does not become a personal use asset because it was eventually spent. The longer an asset is held and the more it is treated as an investment, the weaker the argument.
Treat this as an exception that rarely applies rather than a planning tool. Where it does apply, the corollary is that capital losses on personal use assets are disregarded too.
Income events sit alongside CGT
Staking rewards, airdrops received in defined circumstances, and receipts for services are generally ordinary income at their AUD value when derived, with that value becoming the cost base of the tokens received. The eventual disposal of those tokens is then a separate CGT event.
As elsewhere, failing to return the income does not defer tax; it shifts the entire value into a later capital gain with a nil cost base.
Records
For every acquisition and disposal: date, asset, quantity, AUD value, the exchange rate or price source used, transaction fees, and the wallet or account. Plus transfer records with on-chain identifiers.
The ATO expects records to be kept for the statutory period, and cost base records are needed for as long as the asset is held and beyond. Export from platforms annually rather than relying on continued account access.
Worked example
In one year a taxpayer: buys token A for AUD 20,000; exchanges half of it for token B when that half is worth AUD 18,000; wraps the remaining half when it is worth AUD 19,000; and receives staking rewards worth AUD 1,200 on derivation.
CGT event on the exchange to B: proceeds AUD 18,000, cost base AUD 10,000, gain AUD 8,000, discount available only if the 12-month condition is met.
Wrapping: on the ATO's stated view, a CGT event with proceeds of AUD 19,000 against a cost base of AUD 10,000, notwithstanding that nothing was sold and no funds were received.
Staking rewards: AUD 1,200 ordinary income, cost base AUD 1,200 for those tokens.
No Australian dollars were received all year. Tax is nonetheless payable, in Australian dollars.
What changes this answer
- Capital versus revenue account, which displaces the CGT framework where the taxpayer is carrying on a business.
- The 12-month holding period for discount eligibility.
- Residence status, including part-year residence.
- Entity type, since companies do not access the individual discount and SMSFs have their own rules.
- The income year, for thresholds and current ATO guidance.
- Whether beneficial ownership changed on a given transfer.
Related HolderTax pages
- ATO data matching: read the deadline on your own letter
- Australian loss rules and anti-avoidance purpose analysis
- Tax residency crossings mid-year
Evidence note
Derived from the CGT provisions of the ITAA 1997 and current ATO guidance on crypto assets. Not professionally reviewed. The wrapping position reflects the ATO's stated view, which has been contested; it is presented as the starting point rather than as settled law. Threshold figures are deliberately omitted; confirm them for your income year and obtain Australian professional advice on material positions.