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This is what the Velocity website says...
Ah, but Velocity website also says "Status Credits are not earned for... tickets issued as Air Rewards. However, T&Cs for the 'status credits on reward flights' promotion are here:
Earn Status Credits on Reward Seats Terms and Conditions| Velocity Frequent Flyer
Many members here interpret "book and travel on a Virgin Australia (VA) marketed and operated flight in a Reward Seat Fare Class" as including upgraded bookings into the applicable fare classes. ie buy a K fare, book an upgrade to Z, earn full business status credits. And in practice this is what has been happening during the promotion period.
See this thread for more detailed dissertation:OK. Never was good at reading fine print. That's good to know thanks.