A Guide to Cryptocurrency and other Digital Assets for SMSF Auditors – 5 programs

Program 1: Introduction to Cryptocurrency and Blockchain Technology

Struggling to understand the difference between blockchain, cryptocurrencies and the metaverse? As clients increasingly turn to digital innovations, it has never been more important for their advisers to improve their digital literacy. This introductory session demystifies key terms and fundamentals involved with digital assets, including:

• Introduction to key terms:
  • Blockchain and decentralised ledger technology
  • Cryptocurrency
  • Bitcoin
  • Wallets
  • Metaverse and web 3.0  
• Understanding the underlying technology
• Treatment of passwords
• What happens to ‘lost’ cryptocurrency?  

Program 2: Deep Dive into the Cryptocurrency Market

Cryptocurrencies are exploding in popularity, with clients increasingly needing assistance with crypto matters. This session explores the current cryptocurrency market to help get you up to speed in this rapidly evolving area. It covers:

• Types of cryptocurrencies
• What is cryptocurrency trading and how does it work?
• How do you buy and sell cryptocurrency?
• Staking in Cryptocurrency
  • what is it and how does it work?
  • types of staking
  • what are the risks
• How and why clients are using cryptocurrencies
• Using the correct platforms and mediums when investing

Program 3: Non Fungible Tokens Explained

NFTs are well and truly in the mainstream, from the finance sector to the arts, and come with significant hype. However, despite the buzz, there remains confusion around how exactly NFTs work. This session explores what NFTs are, how they operate, and how they’re being used. It covers:

• Defining NFTs
• How do NFTs differ to other digital assets?
• How are they applied in practice?
• How are NFTs created, bought and sold?
• The future of NFTs

Program 4: Blockchain and the Legal Landscape

The rapid growth of digital assets and blockchain is one of the most disruptive innovations to impact business in recent years. How has the law responded? This session examines the current legal framework impacting blockchain technologies, including: 

• Is it an asset or security?
• Are new cryptocurrencies financial products under the Corporations Act?
• Making and requiring payments in crypto
• Initial coin offerings and their regulatory framework
• How is the market regulated locally and abroad?
• AML issues with digital assets 
• Future legal reforms on the horizon

Program 5: SMSFs and Emerging Digital Investments

With trustees looking for bigger returns than interest bearing deposits, and with investing in the digital world gaining momentum every day, auditors will need to wrap their heads around the audit issues relating to emerging digital investments. This session is designed to get you up to speed on the issues, including:

• What content should be included in the trust deed and investment strategy? (Does “doesn’t say you can, doesn’t say you can’t” cut it?)
• Audit tests required for cryptocurrency, including:
  • proof of ownership where an exchange only allows an individual’s name
  • are declarations of trust required in some cases?
  • insufficient ownership evidence and effect on audit reporting
  • auditing the wallet
  • volatility and subsequent to balance date market movements
• Does the auditor have a reporting obligation to the ATO or trustee if digital investments form the bulk of a fund’s investments?
• The auditor’s own risk management strategy when auditing digital investments
• Related party transactions and the ‘listed securities’ exception – where does cryptocurrency stand?
• Can cryptocurrency be used for contributions?
• The emergence of NFTs:
  • how to value the tangible and the intangible? (SISR 1994 Reg. 8.02B issues and contravention report requirements)
  • trustee motivation - do they satisfy the sole purpose test or is there a ‘virtual gaming’ component?