Australia Introduces Cryptocurrency Exchange Regulations

  • Australian cryptocurrency exchanges will need to register and report to AUSTRAC
  • The new regulations are already in effect. Failure to comply will lead to "civil penalty consequences."

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."

AUSTRAC

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.

Telecom Giant Vodafone Says Goodbye to Facebook-Led Libra Project

Siamak Masnavi

On Tuesday (January 21), British multinational telecommunications conglomerate Vodafone became the eight company to break up with the Libra Association.

On 18 June 2019, when Facebook first officially introduced the stablecoin project Libra, we were told that the Libra Association is an independent not-for-profit membership organization headquartered in Geneva, Switzerland and that there were 28 founding members, "a group of diverse organizations from around the world."

On 4 October 2019, PayPal quit the Libra project.

Four days later, on October 8, two senior U.S. Senators—Brian Schatz (D-HI) and Sherrod Brown (D-OH)—wrote letters to the CEOs of Visa, Mastercard and Stripe in order to share their "deep concerns" about Libra and the Libra Association because important questions about the risks posed by this project "remain unanswered." They also wanted these companies to consider how would they be able to manage these risks before going ahead with this project given that Facebook has not yet proven to U.S. Congress or to financial regulators "that it is taking these risks seriously." 

Then, on 11 October 2019, according to reports published in Bloomberg and in the Financial Times, five more organizations—Visa, Mastercard, eBay, Stripe, and Mercado Pago—followed PayPal's lead and withdrew from the Libra Association. 

Three days later, Bloomberg reported that Booking Holdings, the leader in online travel, had become the seventh founding member to quit the Libra Association. 

Well now, according to a report by Coindesk, it looks like Vodafone has decided that it is time to say goodbye to the Libra Association, saying that it wants to focus its efforts on the international expansion of its payment service M-Pesa, which is already "Africa's most successful mobile money service."

A Vodafone spokesperson is quoted as saying:

We have said from the outset that Vodafone’s desire is to make a genuine contribution to extending financial inclusion. We remain fully committed to that goal... We will continue to monitor the development of the Libra Association and do not rule out the possibility of future cooperation.

And Dante Disparte, Head of Policy and Communications and Vice Chair at the Libra Association, said (via a statement):

Although the makeup of the Association members may change over time, the design of Libra’s governance and technology ensures the Libra payment system will remain resilient.

Although the Libra Association originally intended to launch Libra sometime in the first half of 2020, it seems that the launch could be delayed due to the need to address the concerns expressed by financial regulators around the world. 

Yesterday, while speaking at the Blockchain Central panel held by the Global Blockchain Business Council (GBBC) at World Economic Forum 2020 (held in Davos, Switzerland), Disparte told Coindeks reporter Joanne Po:

We’d rather go slow and get it right, than assign a deadline to launch that keeps us from solving the problem of payments for those who need this solution most.

 

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