Question 1

Does wrapping a token (e.g. ETH to wETH) trigger tax?

Accepted Answer

Yes — this is the rule most people miss. The ATO treats wrapping or unwrapping a crypto asset as exchanging one crypto asset for another, so it triggers a CGT event at the moment you wrap it, not just when you eventually sell the underlying asset. The ATO's own example: wrapping 1 BTC (bought for $165,000) into 1 WBTC worth $180,000 creates an immediate $15,000 capital gain, before you've done anything else with it. (Sources: ATO — Decentralised finance and wrapping crypto (QC 73649).)

Question 2

Does swapping one crypto asset for another count as a taxable event?

Accepted Answer

Yes. Exchanging or swapping one crypto asset for another disposes of the asset you give up and triggers a CGT event, valued at the market value (in Australian dollars) of what you receive. This is true even though no fiat currency changes hands — the ATO's own example values the disposal using the market value of the new coin received in the swap. (Sources: ATO — How to work out and report CGT on crypto (QC 69952); ATO — Crypto to crypto exchange or swap (QC 69949).)

Question 3

How are staking rewards and airdrops taxed?

Accepted Answer

Staking rewards and airdrops of an already-established token are ordinary income at their market value when you receive them, separate from any later capital gain when you dispose of them. An initial airdrop — the very first distribution of a brand-new token with no prior trading — is different: it isn't ordinary income or a capital gain on receipt, and its cost base is zero (or your payment amount, if you paid to receive it). (Sources: ATO — Staking rewards and airdrops (QC 69950).)

Question 4

Is there an exemption for crypto I use personally rather than as an investment?

Accepted Answer

A narrow one. A crypto asset counts as a personal use asset only if you mainly keep or use it to buy items for personal consumption, and a capital gain on disposal is exempt from CGT only if it's a personal use asset that you acquired for less than $10,000. Holding crypto as an investment and later spending some of it doesn't qualify — and any capital loss on a personal use asset can't be claimed at all. (Sources: ATO — Crypto asset as a personal use asset (QC 69954).)

Question 5

What if I lose access to my crypto or it's stolen?

Accepted Answer

You can claim a capital loss for lost or stolen crypto, but only if you can prove you owned it and have genuinely lost access — for example, a lost private key with no way to recover it. The ATO expects evidence such as your public key, wallet address, the dates of acquisition and loss, and exchange account records; the capital loss equals the asset's cost base at the time it was lost. (Sources: ATO — Loss or theft of crypto assets (QC 69951).)

Question 6

What records does the ATO require for crypto?

Accepted Answer

You must keep receipts for every buy, transfer, or disposal, the date and purpose of each transaction, the Australian-dollar value at the time, and details of the other party (even just a wallet address) — for each crypto asset separately, since each is treated as its own CGT asset. Keep these records for five years from the later of when you obtained them or the CGT event occurred. (Sources: ATO — Keeping crypto records (QC 69955).)

Wrapping ETH into wETH triggers a CGT event — the ATO's most-missed crypto rule.