Digital currency exchanges now have to comply with Australia's financial intelligence agency, as the government cracks down on money laundering and terrorism financing through cryptocurrency.

By Joe McDonough


Posted on April 12, 2018

Cybercrime within Australian-based cryptocurrency exchanges will be stamped out and public confidence in the sector will grow as a result of regulatory oversight, says the Australian Transaction Reports and Analysis Centre, better known as AUSTRAC.

Australia’s financial intelligence agency has been granted new powers to scrutinise digital currency exchanges (DCEs), and investigate money laundering and the financing of terrorism.

The new legislation is in line what’s currently in place in Japan and South Korea, and DCEs have been informed they must begin the registration process by May 14.

ABC News understands 20 DECs from the 100-odd operating in Australia, have already complied with AUSTRAC.

CEO of AUSTRAC, Nicole Rose, says the new regulation is being welcomed by the DECs, as it will enhance consumer confidence in crypto-assets.

“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,” she said.

“It’s 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.”

As CoinTelegraph details, the four main points of the new legislation DCEs must adhere to are:

— 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.

The need for stringent regulation was outlined in a report from the Australian Criminal Intelligence Commission (ACIC), which stated there was a significant increase in criminal activity with the rise of cryptocurrencies.

“Virtual currencies, such as bitcoin, are increasingly being used by serious and organised crime groups,” ACIC said in August.

“They are a form of currency that can be sold anonymously online, without reliance on a central bank or financial institution to facilitate transactions.”