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Australia introduces AML/CTF requirements for cryptocurrency exchanges


April 3, 2018 saw another blow to the bear of cryptocurrencies as Australia introduced new legislative norms for operating cryptocurrency exchanges in the country. The digital currency exchanges in the country will have to register themselves and comply with the Anti-Money Laundering and Counter Terrorism Financing Laws (AML/CTF).

The initially instated regulatory apparatus set in Australia concerning digital currencies has been formally adopted as law. This regulation mandates crypto exchanges to comply with the country’s AML/CTF requirements.

The AUSTRAC (Australian Transaction Reports and Analysis Centre) released a document which outlines the prerequisites that digital currency exchanges need to adhere to under the new legislation. The exchanges will register under and report to AUSTRAC.

In addition to “adopting and maintaining an AML/CTF program to identify, mitigate and manage money laundering and terrorism financing risks,” Australian virtual currency exchanges must “identify” and “verify” the “identities of their customers,” keep “certain records for seven years,” and report “suspicious matters” and “transactions involving physical currency of $10,000 or more” to AUSTRAC.

AUSTRAC states that “A ‘policy principles’ period of six months will be in place from 3 April 2018” – during which “the AUSTRAC CEO can only take enforcement action if a DCE business fails to take ‘reasonable steps’ to comply.”

The six month period will also see “Transitional registration arrangements” made available to “existing businesses to allow them to continue providing services while their registration application being considered.” Existing digital currency exchange businesses will need to register for the transitional registration arrangements by May 14th. AUSTRAC warns that the unregistered provision of digital currency exchange services will suffer “criminal offense and civil penalty consequences.”

Last week, the Australian Taxation Office (ATO) announced that it is seeking public consultation from citizens regarding how the ATO should “approach specific tax events.” The ATO, which has been drafting legislation for the taxation of cryptocurrencies, stated that it has “launched a community consultation to help us understand practical issues experienced when complying with cryptocurrency tax obligations.”


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