The Australian Transaction Reports and Analysis Centre (AUSTRAC) has officially introduced a requirement for cryptocurrency exchanges to register with it and comply with its anti-money laundering (AML) and counter-terrorism financing (CTF) rules.
Starting from April 3, 2018, every cryptocurrency exchange operating in Australia is expected to abide by AML/CTF rules and register with the government financial intelligence agency.
The key obligations outlined by AUSTRAC are:
- Implementing and observing an AML/CTF program;
- Verifying customer IDs (KYC);
- Reporting suspicious transactions of $10,000 and above to AUSTRAC;
- Storing certain records for a period of seven years.
There is a transitional period for existing digital currency exchanges. AUSTRAC noted that April 3 marks the start of a six-month ‘policy principles’ period during which the head of AUSTRAC can initiate enforcement action only if a crypto exchange service has taken no ‘reasonable steps’ to ensure compliance with the new rules.
Existing companies providing crypto exchange solutions will have to register with AUSTRAC by May 14, 2018.
The government agency stressed there would be “criminal offence and civil penalty consequences” for crypto exchanges that operate without being registered.
AUSTRAC has issued several materials to help operators comply with the rules. One of the documents is a guide to formulating and implementing an AML/CTF program. It requires that cryptocurrency exchanges classify customers by specific types (companies or individuals, casual or regular, etc.), create profiles, and describe transaction patterns. The latter include the frequency of transaction activity, the amount the client converts to or from fiat money (total and average), and origin of wealth or whether the source of funds is verifiable. Operators also have to ascertain whether the client is suspected of sharing false ID information, perpetrating or being the victim of ransomware, or being involved with the “darknet.”
The document suggests various scenarios and provides examples to help crypto exchanges adopt an AML/CTF program.
Last year, a committee in the Australian Parliament updated an AML/CFT bill with revisions that touched upon cryptocurrency exchanges.
This article appeared first on Cryptovest
