A Victorian court decision in Australia may reshape cryptocurrency taxation after Judge Michael O'Connell ruled Bitcoin functions as money rather than property. According to BTC Peers, the ruling emerged from a criminal case involving federal police officer William Wheatley, who allegedly stole 81.6 Bitcoin in 2019. The court determined Bitcoin qualifies as money similar to Australian dollars instead of capital gains tax assets.

Tax lawyer Adrian Cartland estimates potential refunds could total 1 billion Australian dollars ($640 million) if the decision withstands appeal. The ruling directly contradicts the Australian Taxation Office position that has classified cryptocurrencies as CGT assets since 2014. Under current ATO guidance, any Bitcoin disposal constitutes a taxable event.

Legal Precedent Challenges Decade Of Taxation Policy

The court's interpretation places Bitcoin outside Australia's capital gains tax regime that has governed cryptocurrency taxation for over ten years. SmartCompany reports defense lawyer Adrian Cartland described the verdict as creating "significant law" that totally upends the ATO's current position.

Judge O'Connell's findings treat Bitcoin acquisitions and disposals as having no tax consequences if Bitcoin qualifies as Australian money. However, the ATO has not confirmed refund estimates and stated there are no official figures on potential amounts if the case changes Bitcoin taxation. The decision faces appeal and could reach Federal Court or High Court later in 2025.

CoinGeek notes approximately 31-32.5% of Australians own or have owned digital assets according to the 2025 Independent Reserve Cryptocurrency Index. This population could potentially seek refunds if the ruling stands. Legal experts warn taxpayers against making immediate decisions about Bitcoin holdings while appeals proceed.

Global Cryptocurrency Taxation Landscape Evolving

Australia's potential policy shift occurs amid diverse international approaches to cryptocurrency regulation. Security.org reports 28% of American adults now own cryptocurrency, with 67% of current owners planning to purchase more in 2025. The United States maintains cryptocurrency classification as property subject to capital gains tax.

Koinly explains Australia traditionally applies progressive tax rates to crypto gains, with short-term gains taxed at income rates and long-term gains receiving 50% capital gains tax discounts. Meanwhile, jurisdictions like Switzerland exempt capital gains from cryptocurrency investments at federal level.

European Union regulations through Markets in Crypto-Assets framework standardize rules across member states. Global Legal Insights indicates the US continues grappling with regulatory clarity while different agencies offer conflicting guidance on digital asset classification.

The regulatory landscape remains fragmented globally, with Academic Research showing 58 countries adopting supportive cryptocurrency regulation while 14 countries implementing general bans. Four countries including El Salvador recognize cryptocurrencies as legal tender, reflecting growing acceptance of potential benefits.

Traditional Financial Institution Response And Market Impact

The classification of Bitcoin as money rather than asset carries broader implications for traditional financial institutions. 4IRE Labs reports the crypto banking market exceeded $5.6 billion in 2024, with 560 million cryptocurrency users worldwide driving greater crypto-friendliness.

Office of Comptroller of Currency recently confirmed crypto-asset custody and certain stablecoin activities remain permissible for national banks and federal savings associations. The OCC rescinded requirements for supervised institutions to receive supervisory approval before engaging in cryptocurrency activities.

Recognition of Bitcoin as money would fundamentally alter bank relationships with digital assets, potentially requiring treatment more like foreign currency than speculative investment. This aligns with corporate treasury strategies as FinTech Weekly reports improved accounting treatment expected by late 2025 allowing fair market value reporting.

The global cryptocurrency market reached $3.28 trillion in January 2025, representing 98.8% growth from January 2024's $1.65 trillion according to CoinLaw. Traditional banks respond by embracing blockchain technology and entering collaborative endeavors with cryptocurrency projects to enhance operational efficiency.

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