Australian financial regulator has framed new laws to regulate digital currency exchange or DCE providers operating in Australia in a bid to help strengthen public and consumer confidence in the cryptocurrency market. It primarily includes anti-money laundering and terrorism funding scrutiny.
The new laws floated by the Australian Transaction Reports and Analysis Centre (AUSTRAC) requires DCEs with a business operation located in Australia to now register with it and meet the Government's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) compliance and reporting obligations.
AUSTRAC is Australia's financial intelligence agency and AML/CTF regulator. It was set up to monitor financial transactions to identify money laundering, organized crime, tax evasion, welfare fraud and terrorism.
"The new laws will strengthen the agency's compliance and intelligence capabilities to help DCEs implement systems and controls that can minimize the risk of criminals using them for money laundering, terrorism financing and cybercrime," said AUSTRAC CEO Nicole Rose.
The new laws require DCEs to adopt and maintain an AML/CTF program to identify, mitigate and manage money laundering and terrorism financing risks. They also need to identify and verify the identities of their customers.
Further, DCEs have to report to AUSTRAC suspicious matters, and transactions involving physical currency of $10,000 or more. They are also required to keep certain records for seven years.
Meanwhile, AUSTRAC had earlier said the registration of a DCE or remittance service provider does not constitute an endorsement of that business or compliance with any AML/CTF obligations.
AUSTRAC stated, "Businesses must not use their registration status in any way that suggests AUSTRAC or the Commonwealth Government endorses you or any of your services or products. Words including 'endorsed', 'approved' or 'licensed' are examples of inappropriate wording."
Though the DCEs are required to register online with AUSTRAC from April 3, 2018, there is a transition period until May 14, 2018 to allow current DCE businesses time to register. Running an unregistered DCE will be a criminal offence and will attract civil penalty.
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