Key Highlights

•  Digital assets are about 0.3 per cent of SMSF assets overall, but for funds that hold them the risk sits at fund level and is an evidence problem.

•  The ATO expects a trust deed that permits the investment, a separate wallet in the fund's name, fair market value in Australian dollars and full records.

•  Crypto cannot be acquired from related parties, and members cannot transfer it into the fund in specie.

Crypto and other digital assets are a small slice of the SMSF sector, but for the funds that hold them they can dominate the audit. Two presentations at the Auditors Institute's Auditors Day 2026 in Melbourne show how auditors are thinking about these assets, and what trustees can do to make the audit smoother.

Both presentations feature Jacob Kewley, director of Tactical Super, who argued that the key issue for auditors is evidence: existence, ownership and value.

Small in aggregate, large in individual funds

Kewley said ATO SMSF statistics put digital assets at about $3.3 billion, or 0.3 per cent of total SMSF assets, and that crypto is near the bottom of the sector's list of problem areas. However, he warned that the sector-wide figure means little for a fund that is, for example, 95 per cent invested in crypto. "The takeaway is this – the risk sits at fund level and it's an evidence problem for us," he said.

Kewley noted that while new rules have been introduced for digital asset exchanges and investors, nothing new is aimed specifically at SMSF auditors. The SIS Act still applies, even though it was not written with digital assets in mind.

What the ATO already requires

The ATO's guidance on SMSFs investing in crypto assets sets out the core expectations:

  • the trust deed must allow the investment, and the investment must be consistent with the fund's investment strategy;
  • crypto must be held separately from members' personal and business assets, with clear evidence of the fund's ownership, including a separate wallet for the SMSF;
  • crypto must be valued at fair market value in Australian dollars, sourced from a reputable exchange or published rates, and the ATO accepts the 30 June closing value from an exchange that reports historical values;
  • trustees must keep full records of acquisitions and disposals; and
  • crypto cannot be acquired from related parties, and members cannot transfer crypto into the fund in specie, because it does not fall within the listed securities or business real property exceptions.

The ATO also notes that crypto is a CGT asset rather than money, and that pension payments must be made in cash.

Trust deeds and related-party acquisitions

Kewley said auditors should confirm the trust deed permits digital asset investment. Many modern deeds include a catch-all clause for any investment permitted by law, but older deeds may not. He warned that without appropriate wording, a fund cannot invest in digital assets at all.

He also said that where crypto entered the fund during the year, auditors should ask how it was acquired. If it came from a member, he said, that would be a contravention of section 66 of the SIS Act.

Two audit opinions, two decisions

The second presentation covered how auditors approach their opinion. Kewley said a qualification of Part A, the financial audit, and Part B, the compliance audit, are distinct decisions, though one can lead to the other. Part A addresses existence, ownership and valuation. Part B requires a breach of a specific provision, and he highlighted asset separation under regulation 4.09A, market valuation under regulation 8.02B and related-party acquisitions under section 66 as likely issues.

In a scenario where a fund holds a large balance on an exchange that has not provided a Type 2 controls assurance report, Kewley said the missing report is a warning sign but does not alone change the opinion. If the auditor has exchange statements, full transaction history and independent pricing, an unmodified opinion may be consistent. In his view the absence of the report weighs towards at least a Part A qualification, a Part B qualification is defensible but not automatic, and whatever the decision, the reasoning must be fully documented.

These are one practitioner's views on audit judgment, not ATO rules. Different auditors may reach different conclusions on similar facts.

Practical steps for trustees

  • Check that the trust deed expressly or generally permits digital assets.
  • Hold crypto in a wallet or exchange account clearly in the fund's name.
  • Download full transaction histories and 30 June statements each year.
  • Record the source and method used for the 30 June valuation.
  • Ask the exchange or custodian whether it provides independent controls assurance reports.
  • Make sure the investment strategy addresses volatility, liquidity and concentration.

Takeaway

For SMSFs with crypto, the audit is an evidence exercise. Trustees who can show the deed permits the investment, that the fund owns the assets, how they were acquired and how they were valued at 30 June will give their auditor a better chance of forming a clear opinion.