With the popularity of bitcoin and similar blockchain-based virtual currencies currently booming around the world, the Australian government has passed new legislation extending anti-money laundering and counter-terrorism financing regulations to digital currency exchanges.
Under the legislation, digital currency exchange providers will be required to:
- enrol with the Australian Transaction Reports and Analysis Centre (AUSTRAC) and register on the Digital Currency Exchange Register maintained by AUSTRAC
- adopt and maintain a program to identify, mitigate and manage the money laundering and terrorism financing risks they may face
- identify and verify the identities of their customers
- report suspicious matters, international transactions and transactions involving physical currency that exceeds $10,000 or more (or foreign equivalent) to AUSTRAC, and
- keep certain records related to transactions, customer identification and their program for seven years.
Penalties for breaching these new regulations can include years of jail time, as well as fines for individuals of hundreds of thousands of dollars, and fines for companies of millions of dollars.