Crypto SMSFs in Australia: Key Developments that SMSF Advisory Firms Must Know

Cryptocurrency is emerging as a significant class asset for Self-Managed Super Funds (SMSFs), attracting growing interest from trustees.

However, this change comes with an increase in regulatory scrutiny and meticulous compliance measures, and the unique characteristics of cryptocurrency demand a proactive and informed approach to SMSF administration.

This article covers the recent developments in this space and how advisors should approach it.

The Heightened Regulatory Spotlight on Crypto in SMSFs

In recent months, there has been an increase in regulatory attention on cryptocurrency within the SMSF sector. The Australian Taxation Office (ATO) and the Australian Securities and Investments Commission (ASIC) are actively focusing on this area to ensure the critical need for strict adherence to compliance obligations.

For SMSF Advisory companies, this translates to:

• Increased ATO Oversight: The ATO is implementing more frequent spot checks on SMSFs with cryptocurrency investments. Their primary concerns are ensuring meticulous record-keeping, the absolute separation of personal and fund assets (including the complexities of digital wallets), and adherence to the fundamental “sole purpose test.” Recent ATO communications emphasize the necessity of accurate and supportable valuation of crypto assets, comprehensive documentation of all contributions, and transparent ownership records.
• ASIC’s Active Role: ASIC is also playing an important role in overseeing the digital asset space, especially concerning service providers like cryptocurrency exchanges. They are actively stepping up enforcement actions against unlicensed operators and are consistently reminding trustees – and by extension, administrators – of the importance of legality and financial suitability of any cryptocurrency assets held within SMSFs.
• Potential Regulatory Shifts in the future: The ongoing discussions and potential for regulatory changes that could reclassify certain digital assets as formal financial products require a forward-thinking approach to compliance. SMSF Advisory companies must remain vigilant and prepared to adapt their administrative processes to accommodate any such shifts.

The Unique Compliance Demands of Cryptocurrency within SMSFs

Administering SMSFs with cryptocurrency has a distinct set of compliance challenges that require specialized knowledge and processes:

• Strategic Alignment: Ensuring the SMSF’s investment strategy explicitly permits cryptocurrency investment and clearly outlines the methodologies for acquisition, secure storage, and ongoing tracking of these digital assets is a foundational requirement.
• Absolute Asset Segregation: Maintaining a clear and auditable separation between the SMSF’s cryptocurrency assets and the personal assets of the fund’s trustees is a non-negotiable aspect of compliance. This extends to the management of digital wallets and private keys.
• Comprehensive Transaction Records: Every single cryptocurrency transaction, including purchases, sales, transfers, and even staking or lending activities, must be meticulously documented with precise dates, executed prices, and a clear rationale for the transaction.
• Accurate and Defensible Valuation: Cryptocurrencies must be consistently valued in accordance with ATO guidelines for all reporting purposes. This often requires utilizing reliable data sources and maintaining a clear audit trail of valuation methodologies.
• Audit Preparedness: Annual SMSF audits are now focused on the examination of cryptocurrency holdings. Engaging administrators with demonstrable expertise in the specific compliance requirements for digital assets ensures a smoother audit outcome.

Recent Industry Developments

Remaining informed about the latest news and trends within the cryptocurrency and SMSF sectors is also important for effective administration:

• The Adviser Awareness Gap: Recent research highlighting the discrepancy between financial advisors’ understanding of their clients’ crypto holdings and the actual prevalence underscores the need for SMSF Advisory companies to implement systems for identifying, tracking, and managing these assets, even if they haven’t been explicitly discussed with the client’s primary advisor.
• Improving Exchange Infrastructure: The ongoing improvements in compliance protocols and the emergence of platform features specifically designed for SMSF crypto accounts can streamline certain administrative tasks. However, this also necessitates administrators to stay continuously updated on the capabilities and reporting functionalities of various cryptocurrency exchange platforms.
• ATO’s Heightened Focus on Auditors: The ATO’s clearly laid out compliance priorities for SMSF auditors in 2025, with a significant emphasis on asset valuations, high-volume audit firms, and instances of disqualified trustees, directly impacts the administrative responsibilities of SMSF Advisory companies in ensuring accurate and well-supported asset valuations.
• ASIC’s Enforcement Actions: ASIC’s recent actions against SMSF auditors for various breaches serve as a reminder of the importance of adhering to rigorous processes and maintaining the highest professional standards in all aspects of SMSF administration.

Streamlining Operations in a Complex Environment

As crypto gains traction, with more focus from both the ATO and ASIC, managing digital assets requires not just awareness but precision, agility, and expertise.

Outsourcing your backend SMSF administration to a trusted partner lets your firm ease into these rapid changes while still ensuring best-in-class documentations, audit-ready processes, and mitigating compliance risks.

This strategic approach allows your internal team to focus on high-value advisory work and strengthening client relationships while knowing that the technical intricacies of SMSFs are being expertly managed behind the scenes.

At H Connect International, we partner with SMSF firms to deliver seamless, compliant, and scalable backend administration. Our expert team ensures:

• End-to-End SMSF Administration: From traditional assets to emerging investments, we manage the full scope of SMSF administration—ensuring accurate reporting, clear documentation, and regulatory alignment.
• Confidence in Compliance: With deep knowledge of ATO and ASIC expectations, we keep your clients’ funds audit-ready and compliant for asset segregation, contribution tracking, or evolving valuation requirements.
• Enhanced Operational Efficiency: By handling the technical, time-intensive aspects of SMSF management, we free up your internal team to focus on advisory work, relationship building, and strategic growth.
• Scalable, Future-Ready Support: Whether you’re servicing a handful of funds or scaling your SMSF offering, we adapt to your needs—delivering consistent, high-quality support without compromise.

Read more about our tailored SMSF admin services.