Crypto Investments for SMSFs using CoinJar

CoinJar has been operating since 2013 and is considered a simple, no-fuss, straightforward platform. It trades in over 70 cryptocurrencies. Like many other cryptocurrency exchanges, it is registered with AUSTRAC, which is part of the government’s fight against money laundering and financial fraud.  A crypto exchange is known as a “virtual asset service provider” (VASP).  CoinJar supports SMSFs as part of its business model and is 100% Australian-owned.

You can apply for an account with CoinJar using the CoinJar mobile app or on the web.

It is critical that a crypto exchange provides reliable accounting and tax reporting and complies with the Superannuation Industry (Supervision) Act 1993 (SIS) and its Regulations (SISR). The separation of assets between an SMSF and its members and trustees, as well as the security of crypto assets, are also key considerations.

How does CoinJar help an SMSF comply with SIS and SISR?

CoinJar provides the following:

• Designated SMSF account type
• Maintains security of crypto assets
• Accountant and auditor access to reports
• Compliance with AUSTRAC and ASIC

Cold-storage wallets are used for most crypto holdings, and multi-factor authentication is required for user accounts. Insurance cover for custodial losses.  Cold storage is considered one of the safest security measures because private keys are stored offline. However, ongoing technical innovations are making online storage more secure.

An SMSF accountant or auditor can access the following reports from CoinJar as a PDF or a CSV file, enabling the transactions to be downloaded into specialist superannuation software:

• Account statement
• Purchases and sales
• Deposits and withdrawals

The account statement provides details of the SMSF crypto assets held on specified dates, their valuation, and records all crypto trading transactions as purchases and sales. It also details deposits and withdrawals, which show cash transfers between the SMSF bank account and the crypto exchange.

CoinJar holds an Australian Financial Services Licence (AFSL) and is regulated by ASIC. These regulations are designed to protect consumers and ensure the integrity of financial markets. In addition to AFSL obligations, registration with AUSTRAC requires the platform to verify customers (Know Your Customer, or KYC), conduct risk-based monitoring, automatically report suspicious transactions, including single crypto movements above $10,000 and international funds transfers, and meet strict record-keeping requirements. To cover operational risk, CoinJar must maintain at least $5 million in liquid assets.

What support do CoinJar offer?

You can submit a Support Request or email support@coinjar.com. CoinJar offer email support but does not currently offer phone support. In addition to email support, they have a knowledge base to help with getting started, identity verification and other resources, including guides and articles related to crypto.

Do you have an existing SMSF?

SMSF Australia can assist you in setting up a new SMSF if you do not have one. We assist you with obtaining a trust deed and a corporate trustee, registering the fund with the ATO, obtaining an electronic service address (ESA), and completing other paperwork to comply with SIS laws and regulations.

SMSF Australia does not provide advice on whether an SMSF is suitable for your circumstances. You should seek advice from a financial adviser.

Consider a crypto-friendly bank account

The rise in scams and fraudulent activity has made it more difficult to find a crypto-friendly bank.  The Big Four banks often restrict or limit crypto trading and may not support it for SMSFs.

An SMSF bank account is used to transfer cash to a crypto exchange. It is crucial to consider the following:

• The SMSF bank account name should match your crypto exchange account.
• Banks prefer an AUSTRAC-registered crypto exchange.
• Confirm with your SMSF bank whether they allow transactions with the crypto exchange you plan to use, as bank policies are constantly evolving.
• The ANZ V2 Plus account, which can only be accessed through intermediaries such as financial advisors, accountants, or SMSF administrators, is generally considered to be the most crypto-friendly bank account for an SMSF. We are happy to help clients to setup this account as part of your SMSF Setup fees.

Steps to start trading with CoinJar using the web

The summary of the steps required includes:

1. Sign up to CoinJar
2. Verify Your Info
   • Activate your account
   • Identity verification
   • Compliance requirements
3. Start Trading

As part of verifying the identity of SMSF members and the corporate trustee’s directors, a photo ID, such as a passport or Australian driver’s licence, is required, along with a selfie. A copy of the fund’s trust deed and a copy of the SMSF corporate trustee’s company registration (or another identifying document) will also be required.

There are various ways to set up a CoinJar account, so the following is just a helpful guide.

Step 1:        Sign up to CoinJar

Confirm your account and then sign in

An email will be sent to you to confirm your account

Add your mobile number, and a code will be sent to you as an SMS

Step 2:      Get Verified

Activate your Account

• To activate your account, select “SMSF/Trust”
• Insert the name of your SMSF and trust type is “Self Managed Super (SMSF)”

Identity verification

• You will need to provide details about your SMSF
• The company Type in relation to a corporate trustee is “Proprietary”. For our SMSF clients with corporate trustees, your registered office address is:
  • Unit 8, 435 Fullarton Road, Highgate, SA 5063
• The fund’s principal place of business is generally your home address and not the trustee’s registered address
• Add each director of your SMSF corporate trustee with their personal details
• Each director must have a personal CoinJar account
• List all Ultimate Beneficial Owners – these are the SMSF members
• Each SMSF member must also have a personal CoinJar account – they should already have one, as generally an SMSF member is also a director of the SMSF trustee

More detailed instructions for uploading ID documents are available on the website. The following documents are required as proof of each member’s or director’s identity and for your SMSF and a corporate trustee:

• Photo ID – such as a passport or driver’s license
• ID Selfie
• Copy of the fund’s trust deed
• For SMSF corporate trustees – copy of the company registration or extract from ASIC or company constitution

Compliance requirements

CoinJar will require some additional information about you, which will be collected via a short questionnaire at the end of the process. The information submitted will be reviewed, and an email will be sent when your identification is complete.

Step 3:      Start Trading

Deposit cash and buy cryptocurrency.

Other Exchanges

SMSF Australia does not endorse or suggest any particular cryptocurrency exchange platform or broker. Frequently, clients inquire about SMSF investing in cryptocurrency; therefore, we offer broad guidelines on utilising a crypto platform for such investments. Other Crypto exchanges which we have clients use on a regular basis include UpTrade, Digital Surge and many more.