WHO SHOULD READ THIS
- Providers of digital currency exchanges.
THINGS YOU NEED TO KNOW
- AUSTRAC has worked with the AFP to make arrests and suspend two digital currency exchanges.
WHAT YOU NEED TO DO
- Ensure that you are aware of and complying with your AML/CTF obligations.
Australia's anti-money laundering regulator has suspended the operation of two digital currency exchanges following a joint investigation with the Australian Federal Police.
Two digital currency exchange businesses associated with a 27-year-old Victorian man have been suspended by Australian Transaction Reports and Analysis Centre (AUSTRAC). The joint operation with the Australian Federal Police also resulted in the man's arrest in connection with various drug charges and restraints on over $2 million worth of property .
This is the first suspension of its kind following changes to Australian Anti-Money Laundering and Counter Terrorism (AML/CTF) laws which came into effect in June 2018 and impose obligations on digital currency exchange providers.
Under the new laws, digital currency exchange providers are required to:
- register and enrol with AUSTRAC;
- adopt and maintain an AML/CTF program which complies with the AML/CTF laws and mitigates and manages the provider's money laundering and terrorism financial risks;
- report suspicious and threshold transactions to AUSTRAC; and
- comply with certain record keeping obligations.
A shifting regulatory landscape
Cybercrime Squad Commander Detective Superintendent Matt Craft has indicated the Australian Federal Police and AUSTRAC would increasingly focus on digital currency operations, which he claims is 'fast becoming the preferred choice for organised criminal networks involved in money laundering, funding terrorism'.
AUSTRAC is not the only regulator honing in on digital currencies and their exchanges either. An issues paper, published in January 2019 as part of the Treasury's review into initial coin offerings, contemplates the legal and regulatory treatment of digital currencies in Australia.
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