The Inland Revenue Department is working on guidelines for the tax treatment of cryptocurrencies and may regard it as similar to the proceeds of gold bullion sales that had been held for profit.

An IRD spokesman said preparatory work "is underway on issuing public guidance regarding the tax treatment of cryptocurrencies".

The department declined to comment on the implications for creditors of Bitcoinica, the Auckland-based currency trader put into liquidation in 2012, with the spokesman saying it was unable to comment because the liquidation of the offshore company that held much of its assets is ongoing.

The IRD spokesman referred BusinessDesk to a September 20 note the department issued on the treatment of proceeds from the sale of gold bullion.

It said under section CB 4 of the Income Tax Act 2007, proceeds from the disposal of gold, as with any personal property, would in most instances be deemed income if acquired "for the dominant purpose of disposal".

"In the case of gold bullion, the Commissioner considers that this is particularly so, as bullion does not provide annual returns or income while it is held, nor does it confer other benefits (which other investments that do not provide income while held might)," the note says.

The taxpayer would be able to deduct costs such as the purchase cost and expenditure related to the acquisition such as foreign exchange charges, the note says, in an example of a gold and silver buyer.

Bitcoinica's cash and bitcoin assets are held in accounts on the Mt Gox exchange in Japan, which was the world's largest bitcoin trading exchange when it collapsed in early 2014.

The liquidators have received unsecured claims from 204 creditors of Bitcoinica for 104,714 bitcoins, US$323,241 in cash and US$276,135 of leveraged trading positions.

In liquidator PKF's December 12 report on Bitcoinica LP, it said any distribution was contingent on the receipt of the distribution from the Mt Gox bankruptcy or any civil rehabilitation process that emerges.

Bitcoinica's claims in the Mt Gox bankruptcy have been valued by the Mt Gox bankruptcy trustee at US$31.7 million as at April 24, 2014, the date of the bankruptcy and the level it intends to use for any distribution.

But late last month the trustee said some Mt Gox creditors had filed a petition in the Tokyo District Court to begin civil rehabilitation proceedings.

If successful it could open the door for creditors to recover their bitcoins at the prevailing market levels.

The bitcoin is currently at US$15,770, according to Reuters, meaning the Bitcoinica creditors would be sitting on bitcoins worth about US$1.6 billion.

The bitcoin has soared from US$997.75 at the start of the year and reached almost US$20,000 this month.

PKF said it has received advice on the legal status of bitcoins under New Zealand law, the valuation of creditor claims and creditor entitlements in the liquidation.

It plans to apply to the High Court for directions, "primarily in relation to the valuation of creditor claims and the proposed method of distribution of Bitcoinica's assets", the liquidator says in its December 12 report.

PKF has also received approaches from several parties interested in purchasing Bitcoinica's claims in the Mt Gox bankruptcy but can't respond pending legal advice and court directions.

A spokesman for the Reserve Bank said crypto-currencies would be included in the bank's major review of its currency operating model and supporting infrastructure, now underway.

"This project is focused on demand drivers, distribution models, and cash substitutes," said external communications adviser Angus Barclay. "It includes looking into crypto-currencies, blockchain technology and distributed ledgers."

"The Reserve Bank doesn't regulate bitcoin. Whatever legal status bitcoin has is under ordinary law relating to contracts, tax obligations etc."

The central bank issued a note on crypto-currencies last month and among the points made were that they "raise consumer protection, anti-money laundering, and counter-terrorism financing concerns".

Consumers should also understand that they are extremely volatile, have "non-trivial risks of loss and theft" and provide no certainty that they will continue to function and be valued by transactors, authors Aaron Kumar and Christie Smith wrote.

"As niche payment systems, crypto-currencies do not currently pose material financial stability concerns, but risks could increase in materiality if crypto-currencies become more popular and/or more integrated with the activities of traditional financial institutions," they wrote.

The Financial Markets Authority warns that using crypto-currencies "may make you a target for scammers or businesses selling high-risk investments".

They aren't widely accepted and often trade on unregulated, online-only exchanges that can be hard to trace. There is also the risk that the "coins" will be stolen, it said in a note in October.

Asked about the legal status in New Zealand, a spokesman said bitcoin "is a payment system. It is not fiat currency/legal tender".

"The FMA treats crypto-currency as 'money's worth' and considers the transfer of crypto-currency or the conversion of fiat currency into/out of crypto-currency (including the services provided by an exchange) as the provision of a type of financial service known as a 'value transfer service' for the purposes of New Zealand law," the spokesman said. "The FMA may also treat any crypto-currency as a security for the purposes of the Financial Markets Conduct Act."

Reuters reported last month that more than 980,000 bitcoins have been stolen from exchanges since 2011, with two-thirds of those from Mt Gox. The largely unregulated crypto-currency exchanges have become "magnets for fraud and deception", that report said.

The risks and losses haven't deterred serious institutions from looking at crypto-currencies. Bloomberg reported that Goldman Sachs Group is setting up a trading desk to make markets in digital currencies such as bitcoin.

It aims to have the trading desk in place by June, it said, citing unnamed sources, which would make it the first Wall Street firm to make markets in cryptocurrencies.

Also this week, the Chicago-based CME exchange began trading in bitcoin futures, following Cboe Group's entry into the trade last week.

Separately, Nasdaq-listed Long Island Ice Tea, a drinks company in which Kiwi businessman Eric Watson has a small stake, announced it is changing its name to Long Blockchain Corp and was shifting its focus towards "the exploration of and investment in opportunities that leverage the benefits of blockchain technology".

It will continue to operate the Long Island Brand Beverages as a subsidiary. Shares of the company soared 185 per cent on the news to about US$6.95, a 17-month high.