In an attempt to combat tax evasion within the crypto market, the Australian Tax Office (ATO) is set to request personal and transaction data from 1.2 million accounts on crypto exchanges. The main goal of this initiative is to ensure that investors are complying with tax regulations and to increase transparency within the sector.

By gathering details such as names, addresses, birth dates, and transaction information from crypto exchanges, the ATO aims to identify individuals who are not accurately reporting their cryptocurrency activities when selling assets or using them for transactions. This move is a significant step towards promoting tax compliance and regulating the cryptocurrency industry.

Australia's recent crackdown on the crypto sector, following the collapse of FTX, has included legal action against companies operating without proper licenses and limitations on payments to crypto exchanges by banking partners. The country has also proposed a new licensing regime to further control the market and prevent tax evasion.

The ATO's decision to extend capital gains tax rules to cover tokens used in decentralized lending protocols or token exchanges demonstrates the government's commitment to updating tax regulations to keep pace with evolving cryptocurrency technology. As the crypto industry continues to grow, similar measures to prevent tax evasion may become necessary for other countries as well. However, these actions should not be viewed as obstacles to the sector's development.