Digital currency providers will soon be required to adhere to the AML/CTF standards required for remittance sector providers. Providers will be required to:
- adopt and maintain an AML/CTF program;
- conduct thorough customer identification and due diligence;
- comply with suspicious matter reporting and threshold transaction reporting; and
- comply with all record keeping requirements under the regime.
Digital Currency Register
The draft rules mirror the Rules as they currently apply to the remittance sector. Providers will be required to register with AUSTRAC under a regime similar to the current registers for the remittance industry.
In addition, the draft Rules also propose that digital currency providers will need to provide the following information in circumstances warranting a reportable transaction:
- the denomination or code of the digital currency and the number of digital currency units;
- the equivalent total amount of digital currency in Australian dollars (if known);
- a description of the digital currency including details of the backing asset or thing (if known);
- the Internet Protocol (IP) address information of the beneficiary and/or payee (if known);
- the social media identifiers of the beneficiary and/or payee (if known);
- the unique identifiers relating to the digital currency wallet(s) of the beneficiary and/or payee (if known); and
- the unique device identifiers of the beneficiary and/or payee relating (if known).
An Explanatory Note and the draft AML/CTF Rules are available here.
A consultation period is open until 13 February 2018.
What this means for you
If you are a digital currency provider, it is time for you to start thinking about how you will manage your new obligations under the AML/CTF regime. This most importantly includes drafting and maintaining an AML/CTF Program and KYC policy, in addition to systems and procedures which will identity any AML and CTF risks in your business.