Since the 3rd April 2018, all businesses providing digital currency exchange services in Australia are regulated under the newly amended Anti Money Laundering and Counter Terrorism Financing Laws.
These amendments have come to fruition as Australian authorities endeavour to swiftly solve the ambiguities underpinning tax and identity management within the cryptocurrency space. As such, exchanges must now take ‘reasonable steps’ to adhere to four key principles in order to operate above board with respect to the new AML/CTF rules, and they are as follows:
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 any suspicious matters, and transactions involving physical currency of $10,000 or more; and
Keeping certain records for seven years.
A six-month grace period will accompany the new regulations, during which AUSTRAC will be more lenient on operators who fall short of requirements. AUSTRAC CEO Nicole Rose said the that these newly implemented laws have generally been welcomed by digital currency exchange owners & users. Elaborating on this, Ms. Rose stated that “the new laws will strengthen AUSTRAC’s intelligence capabilities to help DCEs implement systems and controls that can minimise the risk of criminals using them for money laundering, terrorism financing and cybercrime. It is recognised that this reform will help protect their business operations from money laundering and terrorism financing, while regulation will also help strengthen public and consumer confidence in the sector.” Despite this move forward, it is clear that the legal landscape surrounding Digital Currency Exchanges is ever changing. If you are a Digital Currency Exchange (DCE) and need assistance registering with the Australian Transaction Reports and Analysis Centre, as well as the subsequent reporting and identity checking procedures, please contact our specialists at Salerno Law.