In a move aimed at fighting money laundering and terrorism, Australia plans to regulate digital currencies like Bitcoin, by bringing them under the domain of the financial crime-fighting agency AUSTRAC (the Australian Transactions Reports and Analysis Centre).
The news follows a financial scandal involving the Commonwealth Bank of Australia. Five customers were recently accused of financing terrorism through transactions using intelligent deposit machines; and AUSTRAC has said that the bank breached anti-money laundering rules on almost 54,000 occasions.
Japan recently undertook similar regulatory measures, following the collapse of the Tokyo-based MtGox Bitcoin exchange in 2014. 850,000 Bitcoins were lost, worth almost $3.5 billion at today's prices. In the future, any ‘alternative coin' exchange or money transfer business that wants to operate in the country will be regulated by the Japan Financial Services Agency.
China has also worked against money laundering in cryptocurrencies. Earlier this year, the People's Bank of China announced that it was investigating Bitcoin, and told several exchanges that they would be closed if they breached anti-laundering laws - although the country's central bank and government have not released explicit regulations.
The Australian reforms will increase the search and seizure powers of police and customs officers. They are also intended to provide regulatory relief to industry by deregulating ‘low-risk' sectors.
The proposed bill ‘provides net regulatory relief to industry of A$36 million (US$28 million) annually, with the digital currency exchange sector being regulated for the first time, while deregulating low-risk industries such as cash-in-transit, which is already subject to state and territory licensing requirements.'
"Stopping the movement of money to criminals and terrorists is a vital part of our national security defences and we expect regulated businesses in Australia to comply with our comprehensive regime," said Justice Minister Michael Keenan.
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