Australian cryptocurrency exchanges are now operating under the regulatory authority of AUSTRAC.
Effective from yesterday, digital currency exchanges (DCEs) will be required to meet various obligations to ensure compliance with the Anti‑Money Laundering (AML) and Counter‑Terrorism Financing (CTF) Amendment Act 2017.
Among the measures, DCEs need to report all transactions involving more than $10,000 of fiat currency, as well as any suspicious matters.
They will also need to maintain a program to identify and manage risks associated with AML/CTF. That will include protocols for verifying the identities of their customers, and keeping select records on file for a period of seven years.
The measures were introduced after an 18-month consultation period with the Australian Digital Commerce Association (ADCA).
“The ADCA worked very closely with AUSTRAC to bring clarity and oversight to an industry that needed formal regulation in order to allow industry players to adhere to standards,” said ADCA chairperson Loretta Joseph.
“Australia, as a mature market with one regulator, and a government with an innovation agenda, can be a clear leader in the responsible adoption of blockchain technology.”
The website itnews.com.au reports that two domestic DCEs — Independent Reserve and Coinspot — confirmed that they have met their compliance obligations with AUSTRAC.
Over the next six months until October 3, 2018, a transitional “policy principles” period will be in place. During that time, AUSTRAC can only take enforcement action if a DCE is failing to take reasonable steps to meet compliance requirements.
“Transitional registration arrangements will be in place for existing businesses to allow them to continue providing services while their registration application is being considered, the AUSTRAC statement said.
All Australian-based DCEs will need to register for approval with AUSTRAC by May 14, 2018.
The latest developments with AUSTRAC follow an announcement by the Australian Tax Office in January that it was putting together a taskforce to investigate tax-avoidance in cryptocurrency transactions.
Currently, the ATO treats cryptocurrencies as assets for the purpose of calculating capital gains tax.