Australia has just implemented new regulatory obligations cryptocurrency exchanges will need to comply with. A recent announcement published by the Australian Transaction Reports and Analysis Centre (AUSTRAC) reveals the regulator is pushing against money laundering and seeking to bring forward counter-measures agaisnt terror financing.
The announcement comes a week after the Australian Taxation Office (ATO) revealed it was seeking public consultation from citizens regarding how it should approach “specific tax events.” Specifically, the ATO was looking for the public's views on cryptocurrency taxation, as it “launched a community consultation to help us understand practical issues experienced when complying with cryptocurrency tax obligations.”
According to AUSTRAC, cryptocurrency exchanges will now need to:
- Adopt and maintain an AML/CTF program to identify, mitigate and manage money laundering and terrorism financing risks
- Identify and verify the identities of their customers
- Report to AUSTRAC suspicious matters, and transactions involving physical currency of $10,000 or more
- Keep certain records for a period of seven years.
The legislation has been in effect for cryptocurrency exchanges since April 3, for a trial period of six months, which will help measure their success and relative impact on the market for users. During the six-month trial period, AUSTRAC CEO will only take action if exchanges don’t take “reasonable steps” to comply.
At the end of its announcement, AUSTRAC notd:
“There will be criminal offence and civil penalty consequences if you provide digital currency exchange services without being registered.”
Cryptocurrency exchanges are being urged to register, presumably to improve their level of accountability within the marketplace. Australia is also incorporating ‘transitional registration arrangements’ for crypto exchanges, which will come into effect on May 14. These arrangements will allow existing exchanges to continue trading, while transactions and applications are screened for legitimacy.