Australia Introduces Regulations for Digital Currency Exchange Businesses

From now on, cryptocurrency exchanges operating in Australia will have to register and report to the Australian Transaction Reports and Analysis Centre (AUSTRAC).  

According to AUSTRAC’s announcement, digital currency businesses will have to meet the following AML/CTF obligations:
    •    adopting and maintaining an AML/CTF program to identify, mitigate and manage money laundering and terrorism financing risks
    •    identifying and verifying the identities of their customers
    •    reporting to AUSTRAC suspicious matters, and transactions involving physical currency of $10,000 or more
    •    keeping certain records for seven years.

AUSTRAC launched a six-month policy principles period starting from April 3, 2018. During that period, the AUSTRAC CEO can only take enforcement action if a DCE business fails to take ‘reasonable steps’ to comply. 

Existing businesses involved in the provision of DCE services need to register by May 14, 2018. They will be able to continue providing services while their registration application is being considered.

Operators providing digital currency exchange services without registration will be subject to criminal offence and civil penalty consequences. 

Many exchange operators said they see this development as an important step showing that the cryptocurrency industry is safe and is supported on the governmental level as the financial technology of the future.