Australia implements AML/CTF laws for cryptocurrency providers

The Australian Transaction Reports and Analysis Centre (AUSTRAC), Australia’s financial intelligence agency and anti-money laundering and counter-terrorism financing (AML/CTF) regulator, implemented new laws for digital currency exchange (DCE) providers operating in the country. This refers to any business which provides exchange services to convert fiat currency (for example, in Australian or US dollars) into digital currency and vice versa.

The new AML/CTF laws cover for the first time regulation of service providers of cryptocurrencies, including bitcoin.

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 requires regulated entities to collect information to establish a customer’s identity, monitor transactional activity, and report to AUSTRAC transactions or activity that is suspicious or involves large amounts of cash over $10,000.

Effective immediately, DCEs with a business operation located in Australia must now register with AUSTRAC and meet the Government’s AML/CTF compliance and reporting obligations. This includes reporting suspicious matters and threshold transactions to AUSTRAC and keeping records relating to customer identification, transactions, and your AML/CTF program.

The AML/CTF program developed, adopted and maintained by the DCE needs to set out the ways the business will comply with its AML/CTF obligations and identify, mitigate and manage money laundering and terrorism financing (ML/TF) risks.

There is a transition period until 14 May 2018 to allow current DCE businesses time to register.

AUSTRAC CEO Nicole Rose PSM said the new laws will strengthen the agency’s compliance and 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.

Ms Rose said the new laws had been generally welcomed by the digital currency exchange sector.

“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,” she said.

“AUSTRAC now has increased opportunities to facilitate the sharing of financial intelligence and information relating to the use of digital currencies, such as bitcoin and other cryptocurrencies, with its industry and government partners. The information that these businesses will collect and report to AUSTRAC will have immediate benefit in the fight against serious crime and terrorism financing,” Ms Rose added.

Guidance on AML/ CTF programs can be accessed here. 

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