Power Ledger collaborating with the ATO to consult on how capital raised from ICOs are taxed

KEY TAKEAWAYS:

• Power Ledger, the Australian blockchain start-up, has approached ATO for advice as regards treatment of taxes in the cryptocurrency space which is largely unregulated at present.
• Co-founder of Power Ledger, Dave Martin, has pointed out lack of clarity in the current situation and went on to give credit for the initiative to the accounts department.
• He has also expressed hope in acquiring a positive outcome which will not just benefit Power Ledger but will also lay down firm guidelines to be applicable on ICOs’ in future.

Power Ledger, Australia’s representative in the cryptocurrency market has decided to seek advice from Australian Taxation Office, or ATO, regarding how it can best treat Initial Coin Offerings down-under. Efforts of Power Ledger come as part of its continued emphasis on transparent and cautious dealings in the cryptocurrency market, which remains largely unregulated and unmonitored.

Co-founder of Power Ledger, Dave Martin, is hopeful that the consultation will bring about clarity in the process and will better define how taxes need to be handled in case of all ICOs’ and not just Power Ledger. He went on to mention that the initiative had been taken up by the accounts section of Power Ledger and the objective is to outline a clear-cut proposal as regards the method of taxation of ICOs’ proceeds. Given the ambiguity and obscurity of the current taxation laws pertaining to the crypto market, this proposal is expected to have a positive impact on the segment at large.

Presently Bitcoin, Ethereum or any other primary currency is treated by ATO as property or asset for levying taxes, rather than as currency, local or foreign. Subsequent to its public sale, Power Ledger is currently holding on to half its proceeds in form of cryptocurrency, and this amounts to around $16 million in real terms.

Because the cryptocurrency space is not as free as it once was in terms of ease of operation, it is important to take a decision regarding the treatment of taxes and Martin hopes that the ruling would be positive not just for Power Ledger but for the ICO space in general.

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