Australia Follows Japan To Regulate Bitcoin, Crypto-Currencies

Josh O'Neill

18 August 2017

In the wake of a scandal at one of Australia’s biggest banks, the country has said it will bolster its money laundering laws, including bringing bitcoin and other crypto-currency exchanges into its regulatory scope.

Australia’s government said yesterday a coming bill would be the first stage of reforms to strengthen the nation’s Anti-Money Laundering and Counter Terrorism Financing Act.

Under reforms, digital currency exchanges will be brought under the remit of Austrac, Australia’s financial crime fighting agency, for the first time.

“The threat of serious financial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously exploit them,” Minister of Justice Michael Keenan, said. “These measure ensure there is nowhere for criminals to hide.”

Two years ago, global financial crime watchdog Financial Action Task Force found significant deficiencies in Australia’s anti-money laundering regime. For example, under current regulations, one can pay millions in cash for precious stones or a prime property without having to identify themselves or the source of their funds.

The proposed regulatory shake-up comes just days after Austrac accused the Commonwealth Bank of Australia of “serious and systemic” breaches of money laundering laws.

The government’s move to regulate bitcoin and other crypto-currencies is akin to one made by Japan earlier this year. Under new rules introduced by Tokyo, any bitcoin or “alternative coin” exchange or money transfer business seeking to set up shop must come under the regulatory supervision of the Japan Financial Services Agency by October 1.

By regulating bitcoin, Japan has officially recognised it as a legal payment method, a move analysts say has helped the crypto-currency’s price hit record highs. Australia’s new position could also drive up prices.

Meanwhile in Europe, Ukraine is set to weigh in on the regulation of crypto-currencies later this month.