Bitcoin Audit Issues and Considerations

Bitcoin is a relatively new investment class and Trustees should make sure their SMSF is compliant when investing in virtual currency.

With high returns for Bitcoin, SMSFs may consider cryptocurrency investment as part of their investment strategy.

A key consideration with Bitcoin is confirming ownership by the SMSF. It’s important to ensure the SMSF has a legal enforceable right to all assets it owns, including Bitcoins.


Remember to ensure separation between the assets of the SMSF and the assets of Trustees. Members should avoid linking their personal credit cards to Bitcoin wallets. Although a Bitcoin wallet is required for investment, make sure the SMSF name is noted on the wallet to illustrate the SMSF is the owner of the Bitcoins.

Bitcoin Wallet

Similar to a traditional wallet you may carry in your pocket, a Bitcoin wallet is used to store money. The difference is that instead of storing a collection of bills and cards, a Bitcoin wallet stores a collection of Bitcoin private keys. Typically a wallet is encrypted with a password.

Once the necessary software has been downloaded, the SMSF have, in essence, opened a bank account with a zero balance.

A potential compliance hurdle may be that the SMSF may not be noted as owner of the Bitcoin in that the wallet. Trustees should ensure the SMSF name appears on the wallet. Send the auditor a screen-print at year end, noting the SMSF ownership of the Bitcoin.

Related Party Transactions

Bitcoins cannot be used as an in-specie contribution and an SMSF can’t purchase Bitcoin from its Members or related parties as it is neither a listed security nor a commercial property.

Virtual currency must be purchased with cash from the SMSF bank account, therefore illustrating the SMSF is the owner of the Bitcoin or other virtual currency.

Investment Strategy

Bitcoin is not cash; it doesn’t have a physical form and may therefore not be classified under a Fund’s current investment strategy. Cryptocurrency should preferably be noted as an investment choice if an SMSF considers investing in it.  The investment strategy we issue has virtual currency noted as one of the allowable investment categories.

Also remember to ensure the SMSF Trust Deed does not prohibit investments in virtual currency e.g. Bitcoin.

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Superannuation Warehouse is an accounting firm and do not provide financial advice. All information provided has been prepared without taking into account any of the Trustees’ objectives, financial situation or needs. Because of that, Trustees are advised to consider their own circumstances before engaging our services.