Bitcoin SMSF Checklist: Setup, Compliance and Succession

Before an SMSF buys Bitcoin, the trustees should be able to answer yes to every item on this checklist. The list covers trust deed authority, investment strategy, custody, valuation, audit, and succession. Missing any one of these can turn a compliant investment into a problem that costs more to fix than the holding is worth.

Trust deed: the deed either expressly permits cryptocurrency or has been updated to allow it. If the deed is silent or restrictive, do not proceed until it is amended. Investment strategy: the strategy has been reviewed and documents why crypto is appropriate for the fund, including liquidity, risk, concentration, and insurance considerations. The strategy should be signed before the trade.

Custody: the fund has chosen and documented a custody model. If the Bitcoin is on an exchange, the trustees understand the counterparty risk and the provider's terms. If the Bitcoin is in self-custody, the fund has a documented multisignature or equivalent structure, secure storage for seed material, and a process for signing transactions. The custody model must be suitable for a trustee-run fund, not a personal wallet.

Valuation: the fund has a process for establishing 30 June market value. For exchange holdings, the exchange valuation is used. For self-custody, the fund records the wallet balance, the AUD spot price from a recognised source, and the date. Ownership and control: the wallet addresses, exchange accounts, and custody documentation are held in the fund's name and can be produced to the auditor.

Audit: the accountant and auditor have been told about the crypto holding in advance and confirmed they are comfortable with the valuation and custody records. Estate and succession: the fund has considered what happens if a member dies or loses capacity. The binding death benefit nomination and governing rules are aligned with the desired outcome, and the custody partner has a recovery plan.

Get these right before the first purchase, and the fund will have a defensible, auditable, and inheritable Bitcoin holding. Get them wrong, and the trustees are likely to spend the next few years explaining themselves to the ATO, the auditor, and the beneficiaries.