How to Cash Out of Crypto in Australia: A Comprehensive Guide

Conor Maloney · 14 May 2024

What is Cryptocurrency?

Cryptocurrency is a digital or virtual currency that uses cryptography for security. Unlike traditional currencies issued by central banks, cryptocurrencies operate on decentralized networks based on blockchain technology.

The most well-known cryptocurrency is Bitcoin, created in 2009 by an anonymous entity known as Satoshi Nakamoto. Since then, thousands of alternative cryptocurrencies have emerged, each with unique features and applications. Examples include Ethereum, known for its smart contract functionality, and Litecoin, which offers faster transaction processing times.

Cryptocurrencies are stored in digital wallets and can be used for various purposes, such as online purchases, investments, and remittances. The value of cryptocurrencies can be highly volatile, making them both a lucrative and risky investment option.

Why Cash Out?

Cashing out of cryptocurrency means converting your digital assets into fiat money, such as Australian dollars (AUD). There are several reasons why you might want to cash out:

1. Profit Realization: After holding onto your cryptocurrency investments for a period, you might want to cash out to lock in profits, especially if the market value has significantly increased.
2. Risk Management: The cryptocurrency market is highly volatile. Converting some of your holdings to fiat currency can reduce exposure to market fluctuations and safeguard your financial position.
3. Liquidity Needs: You might need to access cash for everyday expenses, investments in other asset classes, or significant financial commitments.
4. Regulatory Compliance: Cashing out can sometimes be necessary to comply with local financial regulations and tax obligations.

Legal and Regulatory Framework

Australia has a well-defined regulatory framework for cryptocurrency, primarily overseen by the Australian Securities and Investments Commission (ASIC) and the Australian Taxation Office (ATO). Cryptocurrencies are legal in Australia, and the country has been proactive in creating regulations that promote innovation while ensuring consumer protection and financial system integrity.

The ATO considers cryptocurrencies as assets, which means that any gains from selling or trading them are subject to capital gains tax (CGT). It’s crucial to keep accurate records of all your cryptocurrency transactions, including dates, values, and purposes, to report them correctly on your tax returns.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) plays a vital role in regulating cryptocurrency exchanges. All exchanges operating in Australia must register with AUSTRAC, adhere to anti-money laundering (AML) and counter-terrorism financing (CTF) laws, and implement robust Know Your Customer (KYC) processes. These regulations help prevent illegal activities such as money laundering and terrorism financing, ensuring a safer trading environment for all participants.

How to Cash Out on Cryptocurrency Exchanges in Australia

Cryptocurrency exchanges are one of the most popular methods for cashing out. These platforms allow users to trade cryptocurrencies for fiat currencies or other digital assets. In Australia, exchanges like CoinSpot, BTC Markets, and Binance Australia are well-regarded for their security, user-friendliness, and regulatory compliance.

To cash out on a cryptocurrency exchange:

1. Register and Verify Your Account: Complete the KYC process by providing identification documents. This step is crucial for compliance with AUSTRAC regulations and to ensure the security of your account.
2. Deposit Cryptocurrency: Transfer the digital assets you wish to sell into your exchange wallet. Ensure you’re transferring to the correct wallet address to avoid any loss of funds.
3. Sell Cryptocurrency: Use the platform’s trading interface to sell your cryptocurrency for AUD. You can choose between market orders (selling at the current market price) and limit orders (setting a specific price at which to sell).
4. Withdraw Funds: Once the sale is complete, withdraw the funds to your bank account. This process can take a few hours to a few days, depending on the exchange and your bank.

Exchanges typically charge fees for transactions and withdrawals, so be sure to review and understand the fee structure of the platform you choose. Additionally, ensure that the exchange has robust security measures, such as two-factor authentication (2FA) and encryption, to protect your assets and personal information.

How to Cash Out on Peer-to-Peer (P2P) Platforms in Australia

Peer-to-peer (P2P) platforms like Hodl Hodl offer a decentralized method for cashing out cryptocurrency. These platforms facilitate direct transactions between buyers and sellers without the need for an intermediary, providing greater privacy and potentially lower fees compared to traditional exchanges.

To cash out on a P2P platform:

1. Register on the Platform: Sign up on Hodl Hodl or another reputable P2P platform. Ensure you complete any required KYC steps to verify your identity.
2. Create a Sell Offer: Once registered, create a sell offer. Specify the amount of cryptocurrency you wish to sell, the price, and your preferred payment method (e.g., bank transfer, PayPal).
3. Find a Buyer: Wait for a buyer to accept your offer. The platform’s escrow service will hold your cryptocurrency until the transaction is complete, ensuring a secure exchange.
4. Conduct the Transaction: Communicate with the buyer to confirm payment details. Once the buyer sends the payment and you verify receipt, release the cryptocurrency from escrow.
5. Complete the Transaction: Confirm that both parties are satisfied, and the transaction is completed. Hodl Hodl’s escrow service ensures that disputes are minimized and resolved fairly.

Using P2P platforms allows for flexibility in choosing payment methods and negotiating terms directly with buyers. However, it is essential to exercise caution and use the platform’s security features to protect yourself from fraud and scams.

How to Cash Out on Bitcoin ATMs in Australia

Bitcoin ATMs provide a convenient and quick way to convert cryptocurrency into cash. These machines, located in various urban centers, allow users to sell Bitcoin and receive cash instantly.

Steps to use a Bitcoin ATM:

1. Locate a Bitcoin ATM: Use online directories or mobile apps to find a nearby Bitcoin ATM. Websites like CoinATMRadar can help you find the closest machine.
2. Verify Your Identity: Some Bitcoin ATMs require KYC verification, such as scanning your ID or entering your phone number. Follow the instructions on the screen to complete this step.
3. Initiate the Transaction: Select the option to sell Bitcoin. Enter the amount you wish to sell and the corresponding cash amount you want to receive.
4. Send Bitcoin: The ATM will generate a QR code. Use your digital wallet app to scan this code and send the specified amount of Bitcoin to the ATM’s address.
5. Receive Cash: Once the transaction is confirmed on the blockchain (which might take a few minutes), the ATM will dispense the cash equivalent.

Bitcoin ATMs are user-friendly and ideal for those who need quick access to cash. However, they often charge higher fees compared to other methods, so it’s important to be aware of the cost before proceeding.

How to Cash Out Funds With a Crypto Card in Australia

  

Crypto cards have become an increasingly popular method for cashing out cryptocurrency. These cards work similarly to traditional debit or credit cards but are connected to your cryptocurrency wallet, allowing you to spend your digital assets directly or convert them into fiat currency like Australian dollars (AUD).

To cash out using a crypto card:

1. Sign Up and Verify Your Account: Register for a crypto card with a provider such as Crypto.com, Binance, or Coinbase. Complete the Know Your Customer (KYC) process by providing identification documents. This step is essential for compliance with AUSTRAC regulations and to ensure the security of your account.
2. Link Your Cryptocurrency Wallet: Connect your crypto wallet to the card. This may involve transferring your digital assets to a wallet hosted by the card provider or linking an existing wallet.
3. Load Your Card: Transfer the cryptocurrency you wish to use onto the card. Depending on the provider, the cryptocurrency may be automatically converted to fiat currency or remain as crypto until you make a transaction.
4. Make Purchases or Withdraw Cash: Use the crypto card to make purchases at almost any merchant that accepts Visa or Mastercard, or withdraw cash from ATMs. The card will convert your cryptocurrency to fiat currency at the point of sale or use the pre-converted fiat balance on your card.

Crypto cards typically come with fees for transactions and ATM withdrawals, so it’s important to review and understand the fee structure of the card you choose. Ensure that the card provider has robust security measures in place, such as two-factor authentication (2FA) and encryption, to protect your assets and personal information.

Using a crypto card can be a seamless and practical way to access your cryptocurrency funds, providing the convenience of traditional banking with the flexibility and benefits of digital assets.

Use the Grineo Card to Spend and Withdraw Stablecoins Like Cash

The Grineo Card, launching in Q2 2024, offers Australian residents a convenient way to spend stablecoins like cash on real-world goods and services globally. Rather than a crypto card, the Grineo Card is a digital assets card with USDT and USDC support.

You can tap or swipe your card to spend stablecoins or withdraw cash from ATMs worldwide, anywhere that Visa is accepted.

To use the Grineo card:

1. Sign Up and Verify Your Account: Register for the Grineo card and complete the Know Your Customer (KYC) process by providing identification documents. This step ensures compliance with AUSTRAC regulations and secures your account.
2. Link Your Digital Asset Wallet: Connect your Grineo wallet app to the card. The wallet supports BTC, ETH, USDT, and USDC, allowing easy storage and swapping of these digital assets.
3. Load Your Card: Transfer USDT or USDC from your wallet to the Grineo card. The card can either hold stablecoins or convert them to fiat currency when you make a transaction.
4. Make Purchases or Withdraw Cash: Use the Grineo card at any merchant that accepts Visa or Mastercard, or withdraw cash from ATMs. The card will convert your stablecoins to fiat currency at the point of sale or withdrawal.

Grineo offers excellent customer service, addressing common pain points for digital asset users, and provides a seamless off-ramp experience. The card charges a 1% commission fee on transactions. Ensure the card provider has robust security measures, such as two-factor authentication (2FA) and encryption, to protect your funds. The Grineo Card complies with local regulations and is registered with AUSTRAC, ensuring a secure and compliant transaction process.

Download the Grineo App for iOS or Android now.

Choosing Reputable Services

When cashing out cryptocurrency, it’s crucial to use reputable services to avoid fraud and ensure compliance with regulations. In Australia, the Australian Transaction Reports and Analysis Centre (AUSTRAC) plays a significant role in regulating cryptocurrency exchanges and service providers. AUSTRAC ensures that these entities adhere to strict anti-money laundering (AML) and counter-terrorism financing (CTF) laws, which are designed to prevent illegal activities and protect users.

Importance of AUSTRAC Regulation

AUSTRAC’s regulation is vital for maintaining the integrity and security of the cryptocurrency market in Australia. By enforcing AML and CTF laws, AUSTRAC helps to:

1. Prevent Fraud and Scams: Registered services are required to implement robust security measures to protect users from fraud and hacking attempts.
2. Ensure Compliance: Service providers must comply with legal standards, ensuring that all transactions are transparent and traceable. This compliance helps users avoid legal issues related to tax evasion and money laundering.
3. Enhance User Trust: AUSTRAC-regulated services are perceived as more trustworthy and reliable, providing users with confidence in the safety of their transactions.

Criteria for Choosing Reputable Services

When selecting a service to cash out your cryptocurrency, consider the following factors:

1. Regulatory Compliance: Ensure the service provider is registered with AUSTRAC. This registration is a key indicator of the provider’s commitment to legal compliance and user protection.
2. Reputation and Reviews: Research the provider’s reputation. Look for reviews and ratings from other users. Trusted sources and well-known platforms are generally safer.
3. Security Measures: Verify that the provider uses robust security measures, such as two-factor authentication (2FA), encryption, and cold storage for digital assets.
4. Customer Support: Good customer support is essential, especially if you encounter issues during the cash-out process. Check if the provider offers timely and effective support.
5. Fees and Rates: Compare fees and exchange rates among different providers to ensure you get the best deal. Be cautious of services with exceptionally high fees or rates that seem too good to be true.

Using AUSTRAC-registered services ensures that you are dealing with compliant and trustworthy providers, adding an extra layer of security to your transactions. Reputable services are essential for a smooth and secure cash-out process, protecting you from potential risks and legal issues.

Final Thoughts

Cashing out of cryptocurrency in Australia involves understanding the regulatory framework, choosing the appropriate method for your needs, and using reputable services to ensure security and compliance.

Whether through exchanges, P2P platforms, ATMs, or OTC trading, each method offers unique advantages tailored to different requirements. By staying informed and adhering to legal requirements, you can successfully navigate the process of converting your digital assets to fiat currency.

Remember, choosing a reputable service that complies with AUSTRAC regulations is crucial for a secure and legal transaction. With the right approach and preparation, cashing out your cryptocurrency can be a straightforward and safe process. Always stay updated with the latest regulations and market trends to make informed decisions about your cryptocurrency investments.

If you’re looking to spend stablecoins like USDC and USDT on real-world goods and assets, sign up to Grineo here!