Aussie blockchain company Power Ledger is consulting with the ATO to shape how ICO proceeds are taxed
Australian crypto sector darling Power Ledger has revealed it’s in consultation with the Australian Taxation Office (ATO) to develop a proposition on how initial coin offerings (ICOs) should be treated in Australia.
Power Ledger, which completed a $34 million ICO in October last year, has long been an advocate for heightened transparency and caution around operating a company in the notoriously unregulated cryptocurrency space.
The startup’s efforts to deliberate with the ATO are a continuation of this, and co-founder Dave Martin hopes will get a clearer and better-defined outcome come tax time for not only Power Ledger, but both past and future Australian ICOs.
“We’re trying to be as transparent as we can, so we’re having these conversations with regulators around a sensible approach to regulation,” Martin told StartupSmart.
“The conversation has been initiated by our accountants, who are helping us to put together a proposition on how the proceeds of the ICO and the broader impact of crypto should be taxed, given the current tax rulings are not particularly clear.”
The ATO currently treats digital currency such as Bitcoin or Ethereum — which is the primary currency used in most ICOs — as neither a local or foreign currency. Instead, they are treated as property and as an asset for capital gains tax purposes.
Power Ledger’s $17 million public sale (with the other $17 million being issued in a pre-sale) was comprised of 27,820 ether, 1,050 Bitcoin and 6,120 Litecoin. Martin says the company is still holding around half of its ICO proceeds still as cryptocurrency, with the remaining withdrawn to help manage cash flow.
With that in mind, the company has at least an estimated $16 million still in cryptocurrency, but the real amount could be double that as it’s not known the crypto contributions of the pre-sale. Martin says the amount is “healthy”, despite the crypto market downturn over the past few months.
To read more, please click on the link below…
