Australia Proposes New Crypto Exchange Regulations

Announcements, Crime, FinTech, Investing, News | August 17, 2017 By:

The Australian government will seek to regulate cryptocurrency exchanges under a new proposal released today by the government’s Justice Ministry. The enhanced regulations would strengthen anti-money laundering rules and bring crypto exchanges under the purview of the Australian Transactions and Reporting Analysis Centre (AUSTRAC), which deals with money transfers in the country.

The proposals will now move to the Australian national legislature for debate. Like in the United States, a bill becomes a law—called an Act in Oz – only after it has been passed in identical form by both Houses of the Parliament and has been assented to by the Governor-General.

The proposed reforms represent another hurdle to overcome for the country’s nascient cryptocurrency and blockchain industries. They were previously hampered by the so-called “double taxation” regulations. Under that rule, which was rescinded on July 1, consumers using digital currency were subjected to sales taxes upon purchase of the digital currency and then again on any use of it for purchase of goods and/or services.

The government rescinded the double-taxation rule after heavy lobbying, indicating it wished to foster the digital space. Several businesses left Australia in 2014 following the double-taxation imposition.

“The threat of serious financial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously exploit them,” said Australia’s Minister for Justice Michael Keenan in a release announcing the new regulatory plans. “These measures ensure there is nowhere for criminals to hide. Stopping the movement of money to criminals and terrorists is a vital part of our national security defenses and we expect regulated businesses in Australia to comply with our comprehensive regime.”

The new regulations as currently constituted do not deal with exchanges that are based in other countries but service Australian citizens.