From 3 April 2018, anti-money laundering and counter-terrorism financing (AML/CTF) legislation has taken effect. Under the new AML/CTF laws, the Australian Transaction Reports and Analysis Centre (AUSTRAC) will commence monitoring the compliance of existing digital currency exchange (DCE) businesses in Australia. As reported in our February edition of LegalBytes, the new AML/CTF laws will regulate digital currency exchange service providers in the same way as traditional currency exchange service providers. AUSTRAC will allow DCE businesses a 6 month period to become fully compliant with the new laws from 3 April to 2 October 2018, during which time existing DCE businesses are exempt from enforcement action if they take reasonable steps to comply with the new laws. Compliance requirements will include:
- registering with AUSTRAC by 14 May 2018
- updating enrolment details with AUSTRAC by 11 June 2018
- implementing and maintaining an AML/CTF program that reflects the business's operations, including robust customer identity verification methods
- reporting physical cash transfers of $10,000 or more and other suspicious activities to AUSTRAC
- keeping records for 7 years
After this period, all DCEs must be registered and fully compliant with the new laws. Businesses who intend to start providing DCE services from 15 May 2018, must first register with AUSTRAC before commencing operations. If unregistered businesses provide DCE services from 15 May 2018, criminal and civil penalties will apply. The AUSTRAC public release can be found here. Further AUSTRAC guidance on compliance with the new laws can be found here.