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As charities look for new and innovative ways to raise funds, they may consider either accepting donations of crypto-assets or investing in crypto-assets.

Generally, the risks connected with a charity investing in crypto-assets are greater and harder to manage than the risks connected with accepting donations because there are external providers who can, for a fee, convert the assets into cash before the charity receives the donation.

A small number of charities already work with crypto-assets and we understand most are doing so through external providers.

Charities must understand that crypto-assets are generally considered a high-risk investment. High risk investments are typically not appropriate for charities.

In this context, charities and their Responsible People should think carefully before either accepting donations of crypto-assets or investing in these assets to ensure it is the right decision for their charity. This includes understanding the opportunities and risks associated with these assets.

Doing this is an important part of managing the charity’s financial affairs responsibly, which is a requirement under ACNC Governance Standard 5.


A blockchain is a method for recording and confirming transactions of assets that is shared among the nodes of a computer network and stores information electronically. It can be thought of as a digital ledger.

A blockchain enables fast trading of crypto-assets peer-to-peer without the need for a trusted third party.

A CASSPr - or crypto assets secondary service provider - is a body that acts as an intermediary to help charities (and others) build blockchain-enabled products. CASSPrs also offer services such as converting cryptocurrency into ‘cash’ that is paid to the charity without the charity having to manage the process.

The term CASSPr is used instead of 'digital currency exchange'.

Crypto-assets are digital representation of value that can be transferred, stored, or traded electronically using blockchain technology. This includes cryptocurrency and non-fungible tokens (NFTs).

Crypto-assets can be highly volatile and can experience significant value fluctuations.

Cryptocurrency is a digital currency that uses cryptography to verify and maintain ownership. Under Australian law, it is considered an asset and not fiat money – that means it is not government-issued currency backed by a commodity such as gold.

Cryptocurrency can, however, be exchanged for money.

Non-fungible tokens (NFTs) are typically digital pictures or artworks, video clips, memes, or items used in online gaming. Each NFT is unique and ownership is recorded via blockchain.

Cryptocurrencies run on decentralised blockchains to conduct, approve and verify financial transactions instead of relying on central banking systems.

Blockchains use a network of computers to validate and record cryptocurrency transactions.

Cryptocurrency exchanges work much like stock trading. Members of the public can visit an online cryptocurrency exchange, transfer cash to an account, and then purchase cryptocurrency as you would stock.

Crypto-assets and charities

Cryptocurrency, digital currencies and cryptocurrency exchanges are legal in Australia.

Currently only a small number of charities accept crypto-assets, and do so primarily as an avenue to reach new donor audiences.

But the continued global digital transformation, accelerated by the COVID-19 pandemic, may mean more people engage with these assets and that more charities consider exploring them.

It is important that charities undertake due diligence before they consider accepting crypto-assets as donations, or investing in them.

Charities’ Responsible People must ensure there are appropriate and lawful processes in place to manage charity assets. They must also ensure they understand how crypto-assets work, as well as their potential benefits and risks – including any legal or tax implications.

It is good practice for charities to seek financial advice about investments. And if your charity decides to investigate the receipt or use of cryptocurrency assets, it should properly document:

  • decision-making processes
  • risk management processes, and
  • policies and procedures for acceptance and transfer of these assets.

Registered charities should also consider how crypto-assets could impact their governance or charity registration obligations, including compliance with:

Accepting crypto-assets as donations

Most charities that accept crypto-assets as donations do so in order to reach donors they cannot reach using more traditional fundraising strategies. Importantly, cryptocurrency is treated as an asset not income by the Australian Taxation Office (ATO), so it will appear on a charity’s balance sheet.

But establishing a crypto-asset donation system can be time-consuming and requires charities have the right expertise. This includes:

  • knowing how crypto-asset trading works
  • deciding on the types of crypto-assets your charity will accept and having a donation platform that can accommodate this
  • the ability to manage cryptocurrency wallets and generate tax receipts for donors.

Many charities do not have the specialist skills or resources to manage crypto-assets. This means they often choose to outsource the process to:

  • an intermediary that will accept the crypto-asset donation, convert it to cash, handle tax receipts and then pay cash to the charity
  • external bodies that can help with marketing campaigns to donors who want to give crypto-asset donations
  • a cryptocurrency exchange that converts donations to cash immediately, but where the charity still deals with donors, the administration, and tax compliance
  • a digital wallet where a charity can receive, send and store cryptocurrency. This is the most administratively complex approach and requires expertise in the area, especially as the overall crypto market is designed for anonymity. Donor information is not collected or stored in a wallet, meaning a charity must have a way to track transactions with donor information, as well as manage administrative and tax requirements.

When a charity decides to engage with crypto-assets, it must develop a comprehensive implementation plan and due diligence process.

This includes establishing policies to ensure safety and security, as well as policies and procedures to ensure the charity is clear on how it will handle non-cash donations or potentially high-risk assets.

These should cover:

  • the method by which the charity will accept crypto-assets
  • which crypto-assets will be accepted
  • how donors will be identified
  • how donations will be vetted to ensure a wallet has not accepted funds seen as high risk, or taken part in interactions with wallets involved in criminal activity such as money laundering or terrorism
  • whether the charity will immediately convert the crypto-asset to cash, or hold the asset in part or in full.

Investing in crypto-assets

While it is legal to invest in crypto-assets, their significant volatility means they are a high risk investment and generally not recommended for charities. In addition, managing them effectively requires expertise and appropriate resourcing.

Some of the risks associated with investing in crypto-assets include:

  • data security issues, including vulnerabilities associated with hacking, malware, ransomware, fraud, and lost or stolen passwords
  • risk of unrecoverable assets due to them not being insurable
  • difficulties in identifying the true source of the assets, which may make a charity vulnerable to engaging with, or being the victim of, criminal activity
  • complex laws and regulations surrounding cryptocurrency, some of which are still in their infancy
  • crypto-assets scams. Scamwatch and the Australian Securities and Investments Commission (ASIC) publish information about cryptocurrency scams and how they work.

Recording and reporting crypto-donations in the Annual Information Statement

Donations of cryptocurrency or NFTs that charities receive are reported at the Donations and Bequests question in the Income Statement section of the Annual Information Statement and as revenue in the profit and loss statement of a charity’s annual financial report.

If a charity holds any cryptocurrency at the end of a financial year, that holding is reported as an asset in the charity’s Balance Sheet in the Annual Information Statement and annual financial report.

Regulation of crypto-assets

Cryptocurrency and cryptocurrency exchanges became legal in Australia in 2017.

In 2018 cryptocurrencies became subject to the Australian Anti-Money Laundering and Counter Terrorism Financing Act 2006 and exchanges must be registered with Australian Transaction Reports and Analysis Centre (AUSTRAC).

ASIC provides information on good practices for cryptocurrency product issuers and market operators under the Corporations Act 2001 (Corporations Act) and the Australian Securities and Investments Commission Act 2001 (ASIC Act).

Cryptocurrency and NFTs are viewed as assets by the ATO and are treated similarly to shares. Receiving donations using cryptocurrency assets or investing in cryptocurrency assets may have taxation implications that a charity’s Responsible People need to understand.

The ATO also provides some useful resources:

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