Australia’s current AML/CTF regime provides for limited regulatory oversight of convertible digital currencies. The Government has recently introduced a Bill which will close the regulatory gap by bringing digital currency exchange providers under the remit of the Australian Transaction Reports and Analysis Centre (AUSTRAC). The Bill defines digital currency as a means of exchange or digital process or crediting declared to be digital currency by the Anti-money Laundering and Counter-terrorism Financing Rules Instrument 2007 (Cth) (AML/CTF Rules), or, a digital representation of money that:
- functions as a medium of exchange, a store of economic value or a unit of account; and
- is not issued by or under the authority of a government body, and
- is interchangeable with money and may be used as consideration for the supply of goods and services, and
- is generally available to members of the public without any restriction on its use as consideration.
Notably, the Bill outlines the creation of the “Digital Currency Exchange Register’, to be overseen by AUSTRAC. Cryptocurrency exchanges will be required to register with AUSTRAC or risk jail time or pecuniary penalties for operating an unregistered cryptocurrency exchange. The AUSTRAC CEO will have 90 days to approve requests for registration, extendable by another 30 days upon notice. Registration may also come subject to conditions relating to the value of virtual or fiat currency exchanged, the volume exchanged, and the types of virtual currency which may be exchanged.