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New AML/CTF Rules for Cryptocurrency Exchanges Came Into Effect in Australia

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by Polina Chernykh · 3 min read
New AML/CTF Rules for Cryptocurrency Exchanges Came Into Effect in Australia
Photo: Pixabay

All cryptocurrency exchanges in Australia now must comply with the new regulation developed to prevent money laundering and criminal attacks.

The Australian agency of Financial Intelligence, named AUSTRAC, has published a new post saying that all digital currency platforms operating in the country have to take into account the new AML/CTF rules. The new requirements just came into force yesterday, on April 3, 2018.

Under the new regulation, all exchanges now must abide by the following rules:

  • Identify and check the identities of their users
  • Report suspicious activity and fiat currency transfers of $10,000 or higher
  • Register with the Austrac agency and adopt, implement, and maintain an AML/CTF program
  • Keep records for seven years

The obligations, developed to eliminate the risk of cryptocurrency fraud, were first proposed by the Australian Senate after approving the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill this December. The new bill also enabled Austrac to keep track of existing cryptocurrency platforms.

Within the next six months, AUSTRAC will be less strict on exchanges not complying with the new rules. “A ‘policy principles’ period of six months will be in place from 3 April 2018. During that period, the AUSTRAC CEO can only take enforcement action if [a cryptocurrency exchange] fails to take ‘reasonable steps’ to comply,” the statement reads.

Independent Reserve and CoinSpot have become the first two exchange platforms that confirmed their registration with Austrac. The CEO of Independent Reserve, Adrian Przelozny, believes the new regulation will help to legitimize the use of digital currency and thus make Australian market more attractive for investors.

“We have been lobbying for increased regulation since we opened for business in 2014,” Przelozny said. “We passionately believe that the digital currency economy will – and should – become just another part of the mainstream economy. In order for that to happen, digital currency needs to be regulated just like any other asset class. This is an excellent new step on that journey.”

To continue legally providing their services, local businesses offering DCE services must register with the agency by May 14, 2018. For operators without registration, the agency noted, there will be criminal offence and civil penalty consequences. They begin with two years in jail and $105,000 for failing to register and go up to seven years jail and penalties of $2.1 million for corporations and $420,000 for severe offences.

Similar obligations have already been introduced in other countries, including Japan, the United States, Canada and the EU.

In October 2017, the government passed another bill that ended the double taxation of digital assets. Before that, all cryptocurrencies were taxed twice: first at purchases and then at sales. According to the new legislation, bitcoin and other virtual currencies will be treated as foreign currencies under the “Goods and Services Tax” GST law.

Altcoin News, Bitcoin News, Cryptocurrency news, News
Polina Chernykh

Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.

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