The Australian government is attempting to crack down on issues such as money laundering and terrorism financing through the introduction of a new Bill, which includes the regulation of cryptocurrency exchanges. Last month, the Coalition Government began implementation of the initial stage of reforms to the Anti-Money Laundering and Counter-Terrorism Financing Act, giving more power to Australian Transactions and Reporting Analysis Centre (AUSTRAC).
AUSTRAC is the Australian government financial intelligence agency set up to monitor financial transactions in order to identify money laundering, organised crime, tax evasion, welfare fraud and terrorism. Under the terms of the Bill, AUSTRAC will have regulatory powers over cryptocurrency exchanges, although the reforms are not intended to impact on financial services or hinder the growth and use of cryptocurrency and blockchain that the country has been keen to promote in recent times.
Hon Michael Keenan MP, Australia’s Minister for Justice and Minister Assisting the Prime Minister for Counter-Terrorism, noted that: “The Bill provides net regulatory relief to industry of $36 million annually, with the digital currency exchange sector being regulated for the first time. The threat of serious financial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously exploit them. These measures ensure there is nowhere for criminals to hide. Stopping the movement of money to criminals and terrorists is a vital part of our national security defences and we expect regulated businesses in Australia to comply with our comprehensive regime. AUSTRAC has a strong track record in ensuring our financial institutions comply with the law. The private sector is an essential partner in ensuring Australian businesses are not exploited by criminals, and I thank industry for their constructive engagement during the development of this Bill.”
This move is in a similar vein to other countries: Japan implemented anti-money laundering and know your customer regulation for cryptocurrency exchanges; China has required bitcoin exchanges to upgrade Anti-Money Laundering measures; In the USA recently, the law was changed to demand that cryptocurrency ICOs meet regulatory requirements as a protection to investors which many see as a positive move for the crypto-community as it adds legitimacy and security to its use, hopefully preventing some of the negative association that cryptocurrencies have drawn since their inception. Many other countries have also begun the regulation of cryptocurrency.
With Australia, which has been very welcoming and encouraging to cryptocurrency and blockchain innovation, now implementing regulatory measures, it may be a sign that thing are moving into a more serious phase with adoption of these technologies being seriously considered on a wider scale. Although some may decry the decision to put restriction on cryptocurrencies, stating the original intent of a decentralised currency free from outside intervention, many will be reassured by safeguards put in place against malicious actors who may otherwise have greater freedom to cause harm. In this way, it could be seen that the regulation will be likely to herald a growth in cryptocurrency use, and the benefits they bring being realised by a much larger audience. In the long run, it should help the community as a whole.