The Australian Tax office has issued warning to Self Managed Super Funds who have invested more than 90% of their funds in cryptocurrencies. SMSF are self-managed funds regulated by the Australian Tax Office. According to ATO, 90% of SMSFs have invested 90% of their retirements funds in cryptocurrencies. It is against the law in Australia to invest 90% of retirement funds in a single asset, whether its property or cryptocurrency.
ATO is planning to send 18,000 warning letters to SMSFs who have invested most of their retirements funds in a single asset. SMSFs are self-managed funds, so it becomes easier for them to invest in cryptocurrencies. The total value of SMSFs in Australia is worth $700 billion.
In the letters, ATO has warned investors that they have to comply with laws to properly invest their funds and manage risk involved in it. These investors can face up to a fine of $4200 for going against the regulations.
There have been instances in Australia where fake crypto companies have scammed retirement funds of citizens. Last year a couple lost $900,000 of their retirement money to such scammers.ATO also announced to send warning letters to auditors of SMSF to aware them about the risk factors involved in crypto investments.
Australian Securities and Investments Commission also warned SMSFs owners about the danger of investing in cryptocurrencies. According to Zebpay Ceo, Australia is the only developed country where people easily can invest in retirement funds in cryptocurrencies. After closing in India due to regulations, Zebpay opened its offices in Malta, Singapur and now Australia.