Blockies 2025 finalist, Startup or Scaleup of the Year, Digital Economy Council of Australia

For Accountants and Tax Advisers

If you have clients who hold Bitcoin, one question comes up again and again: does borrowing against crypto trigger capital gains tax? Working with Cadena Legal, Vield obtained a private binding ruling from the ATO on exactly that question. Here is what it said, and where its limits lie.

Talk to our team

Trusted Partners

2025
ATO private ruling obtained
$50M+
Loans approved
1,000+
Clients
0
Assets rehypothecated

What the ATO ruled

In a private binding ruling dated 27 October 2025, the Commissioner accepted that transferring crypto into a segregated custody wallet as security for a Vield loan does not trigger CGT event A1, and does not create or transfer the asset to a trust. The reasoning turns on section 106-60 of the ITAA 1997, which disregards the vesting of an asset in another entity where that vesting maintains a security over it.

What it does not do

A private ruling binds the Commissioner for the applicant it was issued to, on the exact facts described. It is not a precedent, it confers no protection on any other taxpayer including other Vield customers, and it does not settle the law. A product ruling has been applied for and is pending. None has been granted.

The structure it relied on

The outcome rested on facts rather than on a brand: a segregated wallet uniquely associated with the borrower, no rehypothecation for the life of the loan, and a perfected PPSA charge over the asset at all relevant times. The table below sets out each of them beside the variations that could take another arrangement outside the same reasoning.

For accountants and tax advisers

Working with Cadena Legal, Vield obtained a private ruling from the ATO in which the Commissioner accepted that, for the taxpayer concerned, transferring crypto into custody as loan security did not trigger CGT.

If you advise clients who hold Bitcoin, leave your details below. Our team will talk you through how the loan is structured and where the ruling’s limits lie.

What the outcome turned on

The features the outcome depended on

The ruling turned on a set of structural features. Where an arrangement shares them, the section 106-60 reasoning has the best chance of applying. Where it departs from them, the outcome may differ.

Feature present in the rulingVariation that could change the analysis
Segregated wallet, uniquely associated with the borrowerPooled or omnibus custody mixing customers’ assets
No rehypothecation for the life of the loanLender has rights to lend out, stake or redeploy the collateral
A perfected PPSA charge remains over the asset at all relevant timesNo registrable or perfected security interest, or an unperfected one
Control limited to maintaining and enforcing the securityDocumentation that gives the lender broader operational discretion
The asset is returned to the borrower on repaymentArrangements contemplating conversion, set-off in kind, or non-return
"Under their loan structure, the ATO has confirmed that pledging Bitcoin as collateral isn't a disposal for CGT purposes. For long-term holders, that's the question that has held back the entire industry."
Harrison Dell
Founder, Cadena Legal
Working with Vield

What your clients get

Segregated custody

Collateral sits with Zodia Custody Australia in institutional-grade cold storage, in a unique wallet that is never commingled with another customer. Segregation is not a preference here, it is one of the facts the ruling turned on.

Never rehypothecated

We do not lend, stake or reuse a client’s Bitcoin. It stays untouched for the life of the loan, and it can be verified on-chain at any time.

Insured while held

Customer's Bitcoin is held in segregated cold storage with Zodia Custody Australia, supported by Zodia Custody Australia's multi-layered insurance programme.

Licensed origination

Loans can be issued under Australian Credit Licence 526970, with Vield Capital as Credit Representative 553950, alongside AUSTRAC registration for digital currency services.

The structure, explained

Our team can take you through the security documentation and custody arrangements behind each loan, the kinds of facts the ruling turned on, so you can form your own view for a client.

A team you can call

Vield is Australian, based in Sydney, and has been lending since 2023. Advisers are welcome to contact us to understand the product structure and the facts they need to form their own view.

Collateral sits with Zodia Custody Australia in institutional-grade cold storage, in a unique wallet that is never commingled with another customer. Segregation is not a preference here, it is one of the facts the ruling turned on.
We do not lend, stake or reuse a client’s Bitcoin. It stays untouched for the life of the loan, and it can be verified on-chain at any time.
Customer's Bitcoin is held in segregated cold storage with Zodia Custody Australia, supported by Zodia Custody Australia's multi-layered insurance programme.
Loans can be issued under Australian Credit Licence 526970, with Vield Capital as Credit Representative 553950, alongside AUSTRAC registration for digital currency services.
Our team can take you through the security documentation and custody arrangements behind each loan, the kinds of facts the ruling turned on, so you can form your own view for a client.
Vield is Australian, based in Sydney, and has been lending since 2023. Advisers are welcome to contact us to understand the product structure and the facts they need to form their own view.
Questions & answers

Frequently asked questions

For the applicant in the ruling, on those facts, no: section 106-60 disregarded the transfer. As a general proposition it depends on the specific arrangement and the client’s own facts, so it should not be assumed. Seek advice for the particular case.
No. A private ruling binds the ATO only for the applicant it was issued to, on the facts described. It is not a precedent and confers no protection on other taxpayers, including other Vield customers.
Different facts can produce a different outcome. Pooled custody, rehypothecation rights, or different security documentation may take an arrangement outside the reasoning in the ruling.
Loan proceeds are generally not assessable as income, but confirm the position for the client rather than assuming, and keep the CGT question about the collateral separate from the treatment of the borrowing.
That depends on the purpose to which the borrowed funds are put, and is a separate analysis from the CGT treatment of the collateral. It should be considered on its own facts.
The ruling treats the short post-repayment period as still within the security arrangement, and notes the PPSA charge remains until actual return. On that reasoning the control gap does not, by itself, cause a disposal.
A genuine sale of the crypto would generally be expected to be a CGT event in the ordinary way. The ruling addresses depositing crypto as security, not selling it.
No. A product ruling has been applied for and is pending. None has been granted, and there is no assurance one will be. Until one issues, the position for clients other than the original applicant is unchanged.
Sydney Harbour at dusk, with the Harbour Bridge, the city skyline and yachts moored in the bay.
Get started

Talk to us about your clients.

This page is general information for accountants and advisers, not tax advice. The private ruling binds the Commissioner only for the specific applicant on the facts described and cannot be relied on by any other taxpayer. A product ruling has been applied for and is pending; none has been granted. Your clients should obtain advice tailored to their own circumstances.