Whether or not bitcoin users think it is a good idea, governments around the world are determined to try and regulate how citizens trade their cryptocurrency. Due to this, Australian bitcoin exchanges’ clients should now expect their service providers to focus more on compliance with bureaucracy.
Australian lawmakers have ratified new legislation pertaining to the operation of bitcoin exchanges in the land down under. The “Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017” is meant to update Australia’s regulatory financial framework for the cryptocurrency age.
First introduced back in August by the Senate, the bill gives the Australian Transaction Reports and Analysis Centre (Austrac) the power to officially regulate bitcoin trading venues. From now on, all the exchanges in the country must be registered with the government’s financial intelligence agency to operate legally.
Offering cryptocurrency exchange services without being registered with Austrac is now considered a criminal offense. Failure to comply with the new law carries a minimum penalty of two years in prison and AUD 105,000. The maximum penalty for not registering with the agency can reach seven years in prison and AUD 420,000 for individuals as well as an AUD 2.1 million fine for a company.
Ramification of Austrac Registration
By having to register with the Australian government’s financial intelligence agency bitcoin exchanges will have to follow regulations similar to banks and other fiat cash businesses.
While one might argue that this move gives bitcoin exchanges the same standing as established financial institutions and thus elevates the status of cryptocurrency trading in Australia, it doesn’t seem to offer any new protection or security for clients. At the same time this can force businesses to shift their focus from offering the best service to making sure they follow the government’s dictates.
Exchanges now need to show they are actively pursuing plans to find and resolve any money laundering and terrorism financing risks. According to the AML/KYC practices in Australia, service operators must verify the identities of their customers. They need to report all suspicious activity, international transactions, and transactions that exceed AUD 10,000, to Austrac. They are also required to keep some records of transactions and customer identification for a seven years period.
Are the new regulations good or bad for Australian bitcoin users? Tell us what you think in the comments section below.
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Author: Avi Mizrahi