New regulatory stipulations published today, April 3, 2018, by Australia's financial intelligence agency, Australian Transaction Reports and Analysis Centre (AUSTRAC), are based on legislation that was proposed in 2017 and aren't likely to catch any domestically-based digital currency exchanges (DCEs) off guard. These newly established codes now carry the full weight of the law behind them.
Per AUSTRAC, going forward, DCE businesses operating in Australia will have to:
- Adopt and maintain anti-money laundering (AML) and counter-terrorist financing (CTF) programs that focus on the identification, mitigation, and management of associated risks.
- Verify user identities.
- Report "suspicious matters" to AUSTRAC, as well as any transactions involving "physical currency of $10,000 [AUD] or more."
- Keep certain records for seven years.
AUSTRAC's announcement also disclosed that the Australian government is viewing the next six months as a "transitional" phase, noting that it will hold off on "enforcement action" as long as DCEs are taking "reasonable steps to comply" with the new obligations.
Moreover, AUSTRAC will allow DCEs already operating in Australia to continue their services while their registration applications are being reviewed. Per the announcement, "Existing businesses providing DCE services will need to register by 14 May 2018."
Enforcement actions include "applying for a civil penalty order or an injunction, issuing a remedial direction, giving an infringement notice, or requiring an external compliance audit."
After the Australian Parliament passed the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017 – which amended, revised, and expanded upon previous legislation from 2006 – cryptocurrency exchanges were brought under the regulatory oversight of AUSTRAC, which has firmly established AML/CTF laws.
Chapter 5B of AUSTRAC's compliance guide, titled Digital Currency Exchange Registration Requirements, provides additional information for exchanges seeking government approval.