$640 Million Shake-Up? Bitcoin Redefined as Currency by Australian Court

In a groundbreaking legal ruling that could totally reshape how Australians handle and think about cryptocurrency, an Australian judge has decided that Bitcoin should be treated as money, not a taxable asset. This is a major twist from what has been the norm for over a decade.

For years, the Australian Taxation Office (ATO) treated cryptocurrencies—especially Bitcoin—as capital assets. That meant you’d have to pay Capital Gains Tax (CGT) if you sold, traded, or used Bitcoin and made a profit. But now, this court decision turns that long-standing rule on its head, and the implications are huge.

Let’s break it all down, in simple terms, so you understand what’s going on and why it matters—whether you’ve been investing in Bitcoin for years or just getting started.

What Sparked This Surprising Ruling?

Believe it or not, it all started with a criminal case.

Back in 2019, William Wheatley, a federal police officer, was charged with stealing 81.6 Bitcoin during a drug investigation. At that time, the stash was worth around $492,000 AUD. Fast forward to today, and the same Bitcoin is valued in the multi-millions. That’s quite a jump.

During the trial, the judge—Michael O’Connell of Victoria—made a ruling that’s now making waves across the crypto world. Instead of labeling Bitcoin as a piece of property like gold, shares, or foreign currency, he said it should be treated more like Australian dollars. In short, Bitcoin = Money, not an asset.

This isn’t just some passing comment. It’s a legally binding opinion, and if it sticks, it could reshape how Bitcoin is taxed across the country.

How This Changes the Game for Crypto Taxes

Here’s where things get really interesting.

Since 2014, the ATO has been clear: Bitcoin and other cryptocurrencies are considered CGT assets. That means whenever you sell, trade, or even gift Bitcoin, you’re expected to report that to the tax office—and pay up if you’ve made a gain.

But now, if Bitcoin is classified as money instead of an asset, then CGT wouldn’t apply anymore. Just like you don’t pay capital gains tax when you spend Australian dollars, you wouldn’t pay it when using Bitcoin either.

Adrian Cartland, a tax lawyer, called the decision a complete shake-up. He believes this ruling could lead to massive tax refunds, especially for people who’ve been paying capital gains tax on Bitcoin for years.

His estimate? Around $640 million AUD could be up for grabs in refunds. That’s no small number. Some experts even think it could approach $1 billion AUD if the ruling is upheld and applied broadly.

Will Everyone Get a Refund?

Before we all start celebrating, there’s a catch.

The ATO hasn’t confirmed these refund estimates. In fact, they’re staying quiet for now, saying they haven’t calculated how much money might be returned to taxpayers if the decision ends up rewriting tax law.

Also, remember: this was one judge’s ruling in a criminal case. That means it’s not automatically the new law across the board. For it to fully change how Bitcoin is taxed in Australia, it would likely need to be confirmed in higher courts or explicitly recognized by tax authorities and lawmakers.

Still, it’s a powerful precedent. And it opens the door to major challenges against the ATO’s current crypto tax policies.

What This Could Mean for the Future of Crypto in Australia

If the legal system backs this decision, Australia could become one of the first countries in the world to officially recognize Bitcoin as money in the eyes of the law and tax office. That would be a major milestone—not just for Australian investors, but globally.

Here’s how it could affect everyday crypto users:

No More Capital Gains Tax on Bitcoin: Using Bitcoin for everyday purchases, investing, or even transferring between wallets might not trigger tax obligations anymore.
Simpler Tax Returns: Right now, crypto taxes in Australia can be complex and stressful. If Bitcoin is treated like money, it could mean fewer forms, fewer calculations, and less stress during tax season.
A Boost for Crypto Adoption: If using Bitcoin becomes tax-free, more people might be encouraged to use it in real life. Think: paying bills, shopping, or sending money overseas—all with fewer tax headaches.
Challenges for the ATO: The ATO has built its crypto tax policy around the asset classification. If that falls apart, they might have to go back to the drawing board and rethink the entire approach.

What Should You Do If You Own Bitcoin?

If you’ve been active in the crypto space—especially if you’ve been paying taxes on your gains—it’s probably a good time to:

Talk to a tax advisor or crypto tax expert: They’ll help you understand what this ruling could mean for your specific situation.
Stay updated: This is a developing situation. If the decision is appealed, overturned, or supported by higher courts, the impact could be even bigger.
Keep records: No matter what, continue documenting your crypto transactions. Even if rules change, good records will help you navigate any claims or refunds.

Why This Matters Way Beyond Bitcoin

This isn’t just a Bitcoin story. It’s a moment that could reshape how governments and legal systems across the world look at digital currencies.

If Australia leads the way in treating crypto as money, other nations might follow. That could pave the way for simpler regulations, clearer rules, and less tax confusion in the global crypto market.

It’s also a reminder of how fast things change in the crypto world. One judge’s ruling today could change how millions of people interact with their digital wallets tomorrow.

The Big Picture: A Landmark Decision in the Making

So, what’s the takeaway here?

This ruling might seem like just another legal twist in the world of cryptocurrency, but it’s much more than that. It challenges a decade-old policy, opens the door to major tax refunds, and could completely shift how Bitcoin is used and taxed in Australia.

While it’s too early to know exactly how things will unfold, one thing is clear: crypto law is evolving fast, and anyone involved in digital assets should be paying close attention.

Whether you’re holding Bitcoin for the long run, using it to make purchases, or just curious about crypto, this case is a reminder of how important it is to stay informed—because the rules can change overnight.

And in this case, they just might have.