Tuesday, 13 March 2018 10:38

New rules on cryptocurrency agencies from 3 April

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Australians who wish to purchase cryptocurrencies will have to first provide identity documents and open an account with the digital currency provider in question, a spokesperson for Minister for Law Enforcement and Cyber Security, Angus Taylor (below, right), says.

In response to queries from iTWire, the spokesperson said that while bitcoin could now be purchased from newsagents — as reported — only those holding an account with a digital currency provider would be able to make a purchase.

Changes made to the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Act 2017 would make it compulsory for digital currency exchanges (DCEs) to register with the Australian Transaction Reports and Analysis Centre (AUSTRAC) and comply with anti-money laundering obligations.

These obligations are expected to commence on 3 April and would include the obligation to report suspicious matters to AUSTRAC, the spokesperson said.

"Under the Act, DCEs are required to collect information to establish a customer relationship, monitor transactions and report to AUSTRAC where those transactions involve large amounts of cash, or are suspicious," the spokesperson added.

angus taylor vert"Regulation of DCEs will improve information-sharing between AUSTRAC and the sector, which in turn provides law enforcement with actionable financial intelligence that will support their investigation of criminal activities."

Earlier this year, after bitcoin plunged in value after sharp rises last year, a number of countries - among them China, South Korea, India and the US - indicated that moves were afoot to impose laws on the trading of such assets. At the time, efforts to ascertain Australia's response were unfruitful.

Asked about the use of cryptocurrencies for illegal purposes, the spokesperson responded that the AML/CTF regime regulated businesses that provide services which were likely to pose a risk of money laundering or financing terrorism.

"When regulated businesses provide these services, they are required to identify and verify their customers, and report certain information to AUSTRAC," the spokesperson said.

"AUSTRAC’s financial intelligence and analysis have been used by law enforcement partners to 'follow the money' and track down the financial networks of criminals linked to money laundering, serious crime and terrorism financing."

Asked about the rules around obtaining cryptocurrencies from an ATM, the spokesperson said similar rules would apply - one would have to open an account after providing ID to the digital vendor in question first.

Regarding the role of AUSTRAC, the spokesperson said under the AML/CTF Act, DCEs would be required to collect information to establish a customer relationship, monitor transactions and report to AUSTRAC where those transactions involved large amounts of cash, or were suspicious.

"AUSTRAC is working with digital currency exchange providers to equip them with the toolkit to identify, manage and mitigate the risks of money laundering and terrorism financing and to report suspicious activity," the spokesperson said.

"Compliance with these obligations ensures that AUSTRAC is able to collect information about the movement of money, domestically and internationally. Reports provided by DCEs will fill an intelligence gap about the movement of funds using digital currencies such as bitcoin, and allow AUSTRAC to provide financial intelligence and information to support investigations.

"The regulation has been generally welcomed by the digital currency exchange sector, as it will strengthen public and consumer confidence in the sector and further protect their operations from misuse from money laundering and terrorism financing."


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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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