On 3 April 2018, AUSTRAC commenced its regulation on Digital Currency Exchange businesses.
Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), Digital Currency Exchange providers are required to comply with AML/CTF obligations.
Digital Currency Exchange Provider
In Australia, if your business is a Digital Currency Exchange Provider as defined under AUSTRAC, your business must be registered with AUSTRAC before it can provide digital currency exchange services.
AUSTRAC defines Digital Currency Exchange provider as an individual, business or organisation that:
- Exchanges money (either Australian or foreign currency) for digital currency; OR
- Exchanges digital currency for money (either Australian or foreign currency).
Digital Currency Exchange providers must be registered with AUSTRAC as a reporting entity before it can provide digital currency exchange services in Australia.
How to Register a Digital Currency Exchange Business with AUSTRAC?
If your business comes under the definition of Digital Currency Exchange provider, then the business must:
- Apply to enrol and register with AUSTRAC
- Renew your registration every three years
- Keep your details up to date with AUSTRAC
If your business does not meet the AML/CTF guidelines at the time of registration, AUSTRAC maintains the right to:
- Refuse a new application
- Impose conditions on a new application
- Suspend, cancel, or refuse to renew an existing application
Once registered, the business must also meet the ongoing compliance obligations.
Ongoing Obligations
All Digital Currency Exchanges (DCEs) registered with AUSTRAC are required to:
- Adopt and maintain an AML/CTF Program
- Appoint an AML/CTF Compliance Officer
- Identify, mitigate and manage ML/TF risks in its entity
- Report various transactions to AUSTRAC including International Funds Transfer Instructions (IFTIs), Suspicious Matter Reports (SMRs) and Threshold Transaction Reports (TTRs) to AUSTRAC
- Submitting regular compliance review reports to AUSTRAC.
How can Agile Legal Consulting assist you?
Our lawyers at Agile Legal Consulting are able to assist you with Digital Currency Exchange setup, including:
- Enrolling and registering your Digital Currency Exchange business with AUSTRAC;
- Drafting an AML/CTF Program specifically tailored to your business;
- Reviewing your AML/CTF Program;
- Advising you on your ongoing AML/CTF obligations; and
- Assisting you with the implementation of your AML/CTF program.
If you would like to operate a Digital Currency Exchange in Australia and would like further information or assistance, please contact Shin Guan at shin@agilelegal.com.au.