It is expected that bitcoin transactions will soon be regulated in Australia, as the country’s parliament looks to vote on a new bill that would cover the cryptocurrency in their anti-money laundering and anti-terrorism legislation.
AUSTRAC is the name of the financial regulator in Australia that is going to be given the authority to oversee the trading of digital currencies in online exchanges if the new laws are approved. This would see bitcoin users have to identify themselves clearly, while the exchanges would have the obligation to report anything that they see as being suspicious.
The new laws that have been proposed will also affect the sites where other cryptocurrencies such as Ethereum are traded. Each of the online currency markets would have to be registered if the new laws come into force. The new market register is to be put into place some 6 months after the legislation comes into force.
Indeed, it would be a criminal offence for anyone to offer cryptocurrency exchange services in Australia without being registered to do so. Even relatively small transactions are expected to be subject to Know Your Customer regulations if the bill goes through.
However, the Law Council stated that the proposed prison sentences of up to 7 years for breaking these regulations are “draconian”.
Businesses Required to Enrol and Register
Justice Minister Michael Keenan recently spoke to Parliament on this subject and said that any business trading digital currencies for money or vice versa would be “required to enrol and register with AUSTRAC”.
He went on to say that these companies would be obliged to “establish, implement and maintain” a program to combat money laundering and terrorism financing.
The Australian Criminal Intelligence Commission (ACIC) reported a few months ago that cryptocurrencies like bitcoin were “increasingly being used by serious and organised crime groups”, citing drugs, firearms and cyber-attacks among the products and services that they can be used to pay for.
Among the instances of hacking that have involved bitcoin payment demands are the Petya ransomware case that took place at the Cadbury factory in Tasmania, as well as the worldwide Wannacry attack.
The problems with current Australian regulations is that the cryptocurrencies are currently too tightly defined. They are classed in the Anti-Money Laundering and Counter-Terrorism Financing Act as being internet-based but also backed up by physical commodities such as gold or silver.
Cryptocurrencies aren’t backed by physical commodities, meaning that this current legislation doesn’t cover them.
A number of bitcoin traders in Australia welcomed the moves, although some are reported to feel that the planned legislation is too tough. In particular, a number of users of this currency feel that it is unfair to focus so much on illegal activity when the majority of users simply want a convenient way of paying and receiving payments on the internet.
The incredible, recent price increases in bitcoin have led to each unit being worth a value of $UD7, 500 (close to £4,500). This gives the currency an increase of almost ten times its value in the last 12 months.