This usually means uploading a photo or short video of your face or looking into the lens of your webcam or smartphone camera while following a series of prompts. Exchanges are obliged to follow strict KYC regulations designed to tackle money laundering and fraud. These checks are in place to weed out people using your image to open a fraudulent account. The information is also shared with the Australian Tax Office (ATO) so they can be aware of taxpayers who trade cryptocurrencies. These steps are part of know-your-customer (KYC) process which regulated exchanges must complete in order to keep you safe, as well as stay compliant.

Crypto Trading For Beginners

Assuming you already understand how cryptocurrencies work (and if you don’t, here’s a primer), you first need to choose a platform on which to trade. Once you’ve weighed up the features, fees and feel of the various exchanges and then chosen one, you’ll need to create an account. If you are looking for the best crypto exchange for Australians, you can find our list for 2023 here. A crypto exchange is a platform, usually in the form of a website or mobile app, where buyers and sellers meet to trade cryptocurrencies. Typically, creating an account with a crypto exchange involves an identity check that’ll involve entering some key information about yourself, providing a government-issued ID and passing some biometric checks.

This consideration can sometimes be very broad and can already be fulfilled with the upload of images, photos or videos on a platform or the mere naming of the operator in social media. For this, however, it is necessary that this data goes beyond the information required for the mere technical dispatch of the rewards. The provision of personal data can also lead to the interpretation as a bounty. In contrast to classic airdrops, the random element does not play a role here.

But beware: if crypto assets are delivered with futures, this constitutes a private disposal transaction. However, there are differences in taxation. In the best case, recipients will even avoid taxation. The important thing here is whether chance or a random element decides on the amount of the airdrop or whether the amount of the rewards to be received has already been precisely defined from the start. Airdrops and bounties are a popular marketing tool and at the same time a reward for users.

Rewards from Lending are defined as acquisition transactions in the BMF letter. If a stock exchange price is available, this is to be taken as the market price. “The acquisition costs correspond to the market price at the time of acquisition of the units of a virtual currency or other token (derived from Section 6 (6) sentence 1 EStG). If there is a subsequent sale of the rewards, it is taxable under the one-year holding period.