This four-part series covers what your auditor checks when your fund holds crypto, one test at a time: ownership, existence and control, valuation, and compliance. Part 1 is ownership.
When your fund holds crypto, the first question your auditor asks has nothing to do with the price: we have to establish that the coins belong to the fund at all.
The rule you are being tested against
Regulation 4.09A of the SIS Regulations requires SMSF trustees to keep the money and other assets of the fund separate from those held by the trustees personally. It is a prescribed operating standard, and it applies equally to individual and corporate trustees. The same requirement is reflected in the trustee covenant in section 52B(2)(d) of the SIS Act.
The ATO applies this directly to crypto. Its guidance tells auditors to confirm that a fund's crypto is stored in a digital wallet in the fund's name, separate from any crypto personally held by trustees or members. Its tips for trustees say the same from the other side: the fund's crypto wallet should be registered in the name of the SMSF, and personal crypto kept separate from the fund's assets.
Having done the right thing is not the same as being able to show it, and the auditor has to see the evidence.
What "in the fund's name" looks like
Where possible, the ATO says fund assets should be held in the name of the individual trustees as trustees for the fund, for example Jack and Jill Smith as trustees for the Smith SMSF. With a corporate trustee, it is the company as trustee for the fund.
An account or wallet in your own name, with nothing linking it to the fund, does not show that the coins belong to the fund.
Follow the money: three links in the chain
An auditor traces crypto back from the holding to the cash that paid for it. There are three links:
- The fund's bank account, in the fund's name.
- The exchange or platform account, in the fund's name.
- The wallet, with records showing it was set up for the fund.
Break any one of those links and the evidence of separation weakens. The break can be entirely innocent: a trustee already had a personal exchange account, opening a fund account looked slow, so the first purchase went through the personal account "just to get started". Or a personal card paid for the first buy.
None of that is theft. All of it is visible in the records, and your auditor has to test it against Regulation 4.09A.
When an account cannot be in the fund's name
The ATO accepts that an asset cannot always be held in the name of the trustees as trustee for the fund. Among the reasons it gives are the system that records asset ownership and the account used to purchase the asset.
Where that happens, the auditor still needs evidence that the trustees hold the asset for the fund and keep it separate from their own. The ATO gives a declaration or acknowledgment of trust as an example, and says trustees who do not have that evidence should seek legal advice about how to obtain it.
That document is one of the things your auditor will ask to see.
What your auditor will ask for
For every crypto holding, expect to provide:
- platform or exchange account records showing the account name
- the fund's wallet addresses, and records showing each wallet was set up for the fund
- fund bank statements showing the money leaving, matching the purchases
- the trust deed clause permitting the investment
- any declaration or acknowledgment of trust, where an account cannot be in the fund's name
- records of every purchase, sale and transfer
The ATO tells SMSF trustees to record all crypto transactions, and to keep information about the wallet and any changes made to it.
If you cannot prove it
If an auditor cannot verify that a material crypto holding exists, belongs to the fund or is reported at market value, the ATO's guidance is that we must qualify both Part A and Part B of the audit report. Part A is the opinion on the financial statements, which covers whether the fund owns its assets. Part B is the opinion on compliance, which covers rules such as Regulation 4.09A.
A breach of Regulation 4.09A is also a reportable contravention, which the auditor reports to the ATO in an Auditor Contravention Report where the reporting criteria are met.
Separately, the ATO collects identity and transaction data from crypto platforms under its crypto assets data-matching program, covering the 2014–15 to 2025–26 financial years and including accounts held by super funds.
Before your next audit
The simplest preparation is to look at the name on every bank and exchange account the fund uses, and at the setup records for each wallet, well before lodgment.
If fund crypto turns out to be sitting in a personal account, moving it is not the simple fix it appears to be. It is a question for your adviser before anything moves, and we cover the related-party rules in Part 4. For a contravention that has not been rectified, the ATO runs an SMSF voluntary disclosure service.
Ownership is the first thing your auditor tests. Part 2 covers the next: showing the coins exist and that the fund controls them.
SMSF Audit Group are independent, ASIC-registered SMSF auditors. If your fund holds crypto and you need its annual audit, get in touch.