Cryptocurrency, once viewed as a hidden corner of the financial world where assets could be stored anonymously and beyond the reach of traditional authorities, is no longer inaccessible.
As digital assets become more mainstream, insolvency practitioners and Courts are becoming increasingly familiar with identifying, securing and recovering cryptocurrency. If a company owns digital currencies, those assets form part of the Company’s assets, and a liquidator may sell them for the benefit of creditors.
Is cryptocurrency “property”?
Yes, but the law in Australia isn’t fully settled yet.
In Re Blockchain Tech Pty Ltd [2024] VSC 690, a Liquidator applied under section 483(1) of the Corporations Act 2001 (Cth) to recover 36 Bitcoin said to have been transferred to a defendant under a bailment, together with an account for a further 25 Bitcoin transferred to an exchange. Attiwill J held that a person’s interest in Bitcoin is property, being a chose in action. That reasoning aligns with decisions in the United Kingdom, New Zealand and Singapore.
However, the Full Court of the Supreme Court of Tasmania took a different path in Poulton v Conrad [2025] TASFC 7, endorsing the view that control of a private key amounts to possession and that digital assets may sit in a third category of property. The High Court has granted special leave and judgment is awaited.
The argument is not whether crypto is property; it is what kind it is, and which remedies follow. Either way, it is an asset of the company.
How does a Liquidator find crypto?
Cryptocurrency is not anonymous. Most transactions are recorded permanently on a public blockchain, and while a wallet address does not display the owner’s name, the ledger cannot be altered after the fact. Once a Liquidator identifies a single address, the entire history attached to it opens up. Investigative avenues include:
bank statements showing transfers to and from exchanges
accounting records, ledgers and tax returns, including whether disposals were reported to the ATO
email and cloud accounts holding exchange registrations and verification records
computers, phones, hardware wallets, password managers and safes containing private keys or recovery phrases
specialist forensic investigators, who can analyse blockchain activity and link wallets, exchanges and individuals
The AUSTRAC factor
The strongest practical reason the anonymity myth fails is regulatory. Since 2018, any business providing digital currency exchange services in Australia must register with AUSTRAC and maintain an AML/CTF program. From 31 March 2026, the regime expanded to capture crypto-to-crypto exchange, transfers and custodial services, drawing in many businesses that previously sat outside it.
A company that traded through a compliant Australian exchange has therefore left an identity-verified trail behind it, held by an entity obliged to retain it.
Getting access
Held with an exchange. The Liquidator provides evidence of appointment and requests that the account be frozen and the balance dealt with. Australian registered exchanges are generally cooperative. Offshore or unregistered platforms are another matter; some are quite helpful, some ignore correspondence, some require an order from a court in their own jurisdiction, and some no longer exist.
Held in a private wallet. Where assets sit in self-custody, controlled by keys known only to the director, recovery depends on disclosure, and the legislation provides the liquidator with broad powers to enforce recovery.
Section 530A requires officers to assist the Liquidator and provide information about company property;
Sections 475 and 497 require a sworn Report on Company Activities and Property, which should include disclosure of any crypto owned by the Company;
Section 483 allows the Court to order an officer, banker, or agent to deliver up company property; and
Sections 596A and 596B provide for public examination on oath.
Declining to disclose wallet addresses, keys or transaction history is not a low-risk strategy. It exposes directors to examination, court orders, adverse costs and offence provisions, which can include jail time.
The practical challenges
Recovery is achievable but rarely simple. Once an appointment becomes known, anyone holding the private keys can move crypto in minutes, and there is no bank to call and no transaction to reverse. This makes securing crypto far more urgent than securing a forklift.
Volatility means the timing of realisation must be defensible, disposal triggers a CGT event, and forensic tracing is expensive enough that it will not always be commercial for a liquidator. Judgement about when to pursue digital assets matters as much as the ability to do so.
Practical lessons
Directors should record digital assets in the company’s books and disclose them as soon as an insolvency practitioner is appointed.
Advisers should ask questions before a crisis. Unrecorded digital assets are a common reason accounts fail to reflect commercial reality.
Creditors should note that crypto can be a genuinely recoverable asset, particularly where a company appears asset-poor, but its bank statements show exchange activity.
Conclusion
The belief that cryptocurrency is beyond the reach of a Liquidator is largely a myth. Although digital assets present practical challenges, Liquidators increasingly have access to investigative tools, forensic specialists and legal processes to identify, secure and sell cryptocurrency.
If you or your company hold Crypto assets and are faced with financial difficulty, you should contact a Worrells Principal to discuss your available options.
