The Australian government is stepping up its regulations on cryptocurrency exchanges. The country’s Transaction Reports and Analysis Centre, which monitors financial transactions to identify organized crime, money laundering, tax evasion, welfare fraud and terrorism, says existing exchanges will need to register with the agency by May 14, 2018. Any company that fails to register an exchange is subject to criminal and civil penalties.
Businesses are also required to identify and verify the identities of their customers, and report suspicious matters and transactions involving fiat currency of $10,000 AUD or more. Certain records must also be kept for seven years.
Australia is applying its regulatory rigor to Bitcoin and cryptocurrencies in the wake of a major banking scandal. The government’s financial intelligence unit recently filed a lawsuit against Commonwealth Bank of Australia for violations that allegedly led to money laundering and other crimes between 2012 and 2015.
With a more coordinated regulatory effort across all exchanges in every country, customers’ funds could be better protected against the types of hacks and security breaches that allowed the meltdown at Mt. Gox and the stolen NEM from Japan’s Coincheck. Regulations aimed at protecting consumers may serve to offer assurance that governments actually understand how cryptocurrency management works, demystifying the complexities of online accounts, wallets and cold storage, and fostering mainstream adoption. At the same time, UI developers of several cryptocurrency projects, such as Ethos and Cloakcoin, are trying to redesign wallets so that they’re user-friendly, and less reminiscent of the internet’s early days when navigation was arcane, cryptic and confusing.
Enthusiasm for cryptocurrencies is high in Australia. Australian exchanges traded more than $3.9 billion AUD ($3 billion USD) in cryptocurrencies in 2017, with most traders identified as men under the age of 40, according to a joint report from the Australian Digital Commerce Association and Accenture.