New AML rules for crypto exchanges come into force in Australia

on Apr 5, 2018

New rules for cryptocurrency exchanges have kicked in Australia, as part of the local regulators’ efforts to tackle money laundering and terrorist financing.

The country’s financial intelligence agency AUSTRAC on Tuesday issued a statement, reminding local digital currency exchanges that they are now required to meet new AML/CTF obligations.

“A ‘policy principles’ period of six months will be in place from 3 April 2018. During that period, the AUSTRAC CEO can only take enforcement action if a DCE business fails to take ‘reasonable steps’ to comply,” the watchdog said in the statement.

As part of these new obligations, digital currency exchanges will need to: adopt and maintain an AML/CTF programme to identify, mitigate and manage money laundering and terrorism financing risks; identify and verify the identities of their customers; reporting to the regulator any suspicious matters, as well as transactions involving physical currency of $10,000 or more and keep certain records for seven years. Existing platforms will be allowed to continue to operate, but they will need to register with the regulator by May 14. There will be “criminal offence and civil penalty consequences” for exchanges that continue to operate without being registered, AUSTRAC warned.

By implementing the new rules, Australia becomes the latest country that has stepped up its effort to clamp ow on crypto-related illicit activities since the start of 2018. Earlier this year, South Korean authorities ordered local cryptocurrency exchange to adopt a real-name trading system, as part of a larger plan to curb cryptocurrency speculation and illicit activities. And in March, Japan’s financial watchdog penalised a number of exchanges based on the findings of a probe that aimed to check for security flaws that could enable money laundering or endanger customers’ funds.

Meanwhile, China has also taken steps to expand its ban on cryptocurrency trading in the country.