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Anti-Money Laundering laws to extend to digital currency exchange providers

17 May 2018
kelly dickson
Read Time 2 mins reading time

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) was amended on 3 April 2018 to incorporate digital currency exchange (DCE) providers as a designated service under the AML/CTF Act. DCEs now fall under the watchful eye of the Australian Transaction Reports and Analysis Centre (AUSTRAC) and have to comply with AML/CTF laws.

The rise of cryptocurrencies and the largely unregulated digital currency space open it up to the risk of money laundering and terrorist financing activity. These changes are effective immediately and it requires DCE providers to register with AUSTRAC by 14 May 2018.

What is a DCE provider?

  • A DCE provider is a business that exchanges digital currency with money or vice versa
  • It is not limited to exchanges of digital currency and Australian currency – it can be any other foreign currency
  • Includes businesses exchanging digital currency for gaming chips or tokens.

AML/CTF obligations for DCE providers

DCE providers will now need to comply with AML/CTF obligations such as:

  • Reporting obligations for suspicious matters and transactions which are over $AUD 10,000 or more in value
  • Identify and verify the identities of their customers or customer’s beneficial owner/s
  • The 7 year record keeping requirement
  • Designing, implementing and maintaining an AML/CTF program.

DCE businesses can register online on the AUSTRAC website. AUSTRAC has also provided existing DCE providers with transitional registration arrangements to continue conducting business while their registration application is being considered.

DCE providers are subject to severe criminal and civil penalties for non-compliance if they continue to operate without a registration.

Privacy law implications

Please note reporting entities must comply with the Privacy Act 1988 (Privacy Act) when conducting activities to comply with AML/CTF Act. Some entities that would otherwise be exempt from the Privacy Act have obligations under the Privacy Act because they are a reporting entity under the AML/CTF Act.

 How Macpherson Kelley can help

Macpherson Kelley’s lawyers have extensive technical knowledge and industry experience advising on AML/CTF and privacy law. We can help create AML/CTF programs, conduct reviews on existing AML/CTF programs and ensure privacy law compliance. Please contact us for more information.

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Anti-Money Laundering laws to extend to digital currency exchange providers

17 May 2018
kelly dickson

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) was amended on 3 April 2018 to incorporate digital currency exchange (DCE) providers as a designated service under the AML/CTF Act. DCEs now fall under the watchful eye of the Australian Transaction Reports and Analysis Centre (AUSTRAC) and have to comply with AML/CTF laws.

The rise of cryptocurrencies and the largely unregulated digital currency space open it up to the risk of money laundering and terrorist financing activity. These changes are effective immediately and it requires DCE providers to register with AUSTRAC by 14 May 2018.

What is a DCE provider?

  • A DCE provider is a business that exchanges digital currency with money or vice versa
  • It is not limited to exchanges of digital currency and Australian currency – it can be any other foreign currency
  • Includes businesses exchanging digital currency for gaming chips or tokens.

AML/CTF obligations for DCE providers

DCE providers will now need to comply with AML/CTF obligations such as:

  • Reporting obligations for suspicious matters and transactions which are over $AUD 10,000 or more in value
  • Identify and verify the identities of their customers or customer’s beneficial owner/s
  • The 7 year record keeping requirement
  • Designing, implementing and maintaining an AML/CTF program.

DCE businesses can register online on the AUSTRAC website. AUSTRAC has also provided existing DCE providers with transitional registration arrangements to continue conducting business while their registration application is being considered.

DCE providers are subject to severe criminal and civil penalties for non-compliance if they continue to operate without a registration.

Privacy law implications

Please note reporting entities must comply with the Privacy Act 1988 (Privacy Act) when conducting activities to comply with AML/CTF Act. Some entities that would otherwise be exempt from the Privacy Act have obligations under the Privacy Act because they are a reporting entity under the AML/CTF Act.

 How Macpherson Kelley can help

Macpherson Kelley’s lawyers have extensive technical knowledge and industry experience advising on AML/CTF and privacy law. We can help create AML/CTF programs, conduct reviews on existing AML/CTF programs and ensure privacy law compliance. Please contact us for more information.