Super just got smarter: Pay It Now + Tax on Chain = Australia’s only compliant crypto SMSF

10 Oct

1) Why this matters now

Australian trustees and advisers are seeing a sharp rise in crypto inside SMSFs. The ATO has published explicit guidance and warnings about how SMSFs must treat crypto (ownership, record-keeping, valuation and secure custody). At the same time AUSTRAC/ASIC enforcement actions against non-compliant providers mean choosing the right exchange/provider is no longer optional — it's central to keeping your super fund compliant.

2) What “Pay It Now + Tax on Chain” actually is

PayItNow is a payments + exchange platform that offers a tailored self-managed superannuation fund (SMSF) solution and pairs it with on-chain tax accounting (Tax on Chain style reporting / crypto tax tooling) so transactions are captured and reported in a way designed to meet Australian tax requirements. That combination aims to give trustees:

real-time transaction visibility;
properly named wallets owned by the SMSF;
on-chain trails suitable for tax reporting and audit.

This model matters because ATO guidance stresses that SMSF trustees must ensure legal ownership, accurate valuations and records for crypto assets — and that funds are managed in line with the fund deed and sole-purpose test. Having tax-aware on-chain records makes that job easier.

3) How a compliant crypto SMSF works (step-by-step)

Establish SMSF structure — review your trust deed to confirm crypto is allowed, choose trustee structure (individual vs corporate) and get an SMSF auditor/accountant.

Open the SMSF wallet — wallet must be titled in the SMSF’s name (not your personal wallet). This is non-negotiable for ownership clarity.
Use an exchange/provider with proper controls — choose a provider that supports named wallets, strong custody options and transaction export for tax. PayItNow offers SMSF features that focus on these needs.
Capture on-chain events — every buy/sell/swap/stake/transfer should be recorded with timestamps, transaction IDs and counterparty details where available. That’s the “Tax on Chain” idea: your tax events are visible on the ledger and reconciled to your books.
Annual valuations & reporting — trustees must value crypto properly per ATO guidance and lodge accurate returns, including capital gains events and income (staking, airdrops).

4) Key compliance checks (ATO, AUSTRAC, ASIC)

Ownership & documentation: Wallets must be clearly registered to the SMSF. The ATO emphasises naming and separation to prevent breaches.

AML/CTF obligations for providers: Exchanges that operate with Australian customers must be registered with AUSTRAC; trustees should expect KYC, AML logs and transaction monitoring from their provider.
Financial services & promotion: ASIC guidance notes Australian laws apply to offerings/promotions to Australians even if the provider is offshore. Check whether the exchange’s activities attract financial services licensing or disclosures.
Accurate tax treatment: the ATO treats many crypto actions as CGT events — selling, trading, spending, gifting — and requires clear records. On-chain tax accounting helps reconcile wallet activity to taxable events.

5) Benefits & limitations compared with conventional Australian exchanges

Benefits of a PayItNow-style crypto SMSF (with on-chain tax):

End-to-end visibility: you can trace transactions on chain and match them to tax records.
Wallets in SMSF name reduce ownership disputes at audit.
Faster reconciliation for accountants — fewer manual exports and fewer mismatches.

Limitations & risks:

Custody risk: if private keys are lost or stolen, SMSF assets can be irrecoverable — the ATO warns SMSF trustees have lost funds via lost passwords and scams. Proper custody models and insurance matter.
Regulatory complexity: AUSTRAC/ASIC actions show providers and trustees must stay vigilant — not all exchange features available offshore will fit Australian law.
Fees and tax events: frequent on-chain trading increases admin and CGT events — not ideal for all SMSFs.

How this compares to Australian cryptocurrency exchange options: Australian exchanges will often be AUSTRAC-registered and have clear local compliance. A provider that combines an SMSF product with on-chain tax tooling can shortcut reconciliation pains — but trustees should validate AML controls, audit trails and legal disclosures before onboarding.

6) Fees, custody and security considerations

Custody models: non-custodial (trustee holds keys) vs custodial (provider holds keys). For SMSFs, custody must be agreed in the trust deed and documented. The ATO recommends secure practices and clear ownership records.

Insurance & recovery: ask providers about insurance coverage for exchange hacks and the claims process — many losses remain uninsured across the industry.
Fee transparency: compare trading fees, deposit/withdrawal fees, wallet setup and SMSF admin fees. On-chain tax tooling can reduce accountant fees but may add tooling/subscription costs.

7) Quick setup checklist for SMSF trustees

Confirm your SMSF deed permits crypto investments.

Choose trustee type (individual vs corporate) and get an SMSF auditor/accountant.
Register a wallet in the SMSF’s name and document ownership.
Use a provider that supplies transaction exports and audit-grade records (transaction IDs, timestamps, wallet addresses).
Reconcile on-chain events with your accounting software each quarter.
Keep cold backups, secure key storage and follow multi-sig or institutional custody where appropriate.

Author & review box

Author: Senior SMSF & Crypto Advisor — 10 years experience in digital assets and retirement law.
Reviewed by: SMSF compliance specialist (chartered accountant).
Business: PayItNow (payitnow.io) — Unit 3/38b Birmingham Drive, Middleton, Christchurch 8024, New Zealand.
Phone: +64 3 925 8870 | Email: [email protected], [email protected].

FAQ

Q — Can I just transfer my personal crypto into my SMSF wallet?
A — No. The ATO and SMSF rules require clear ownership and appropriate documentation. Transferring personal assets into the SMSF without following the deed and valuation rules risks breaches.

Q — Are on-chain records enough for tax purposes?
A — On-chain records are excellent evidence, but you still need valuation methodology, trust deed proof and supporting documents. Use on-chain IDs plus accounting reconciliations. (

Q — Is PayItNow an Australian company?
A — PayItNow is located in Christchurch, New Zealand, but offers SMSF solutions and services that support Australian trustees — always confirm legal and tax suitability for your fund.

Q — Do I need AUSTRAC-registered counterparties?
A — If you’re using an exchange to buy/sell crypto and it operates in Australia, expect AUSTRAC registration and AML/KYC controls. Offshore providers may still be usable, but be careful about regulatory gaps.

Q — Will frequent trading in my SMSF cause problems?
A — Frequent trading can create many CGT events and higher admin costs. Trustees should have a clear investment strategy consistent with SMSF rules.

Roberts J