Australian authorities are making progress with revisions to the AML/CTF bill which will include bitcoin exchanges under the scope of Australian legislation for the first time.
The Australian Parliament published [PDF] newly updated provisions today, part of a wider reform of the government’s anti-money laundering and counter-terrorism financing (AML/CTF) laws. In it, the Senate Legal and Constitutional Affairs Legislation Committee has prioritized the regulation of digital currency exchange operators, among other objectives, under the purview of the Australian Transactions and Reporting Analysis Centre (AUSTRAC), the country’s financial intelligence agency and watchdog.
Underlining the recommended regulatory move as an industry ‘best practice’, the committee added:
AGD observed that the Report on the Statutory Review recommended the application of the AML/CTF Act and the Regulations to digital currencies and digital exchange providers.
The highlights specific to digital currency exchanges are:
The bill will enable new powers conferred on AUSTRAC’s chief executive, enabling the official to “make rules to expand or narrow the scope of the digital currency definition.”
A number of civil penalties will be introduced for unregistered operators of digital currency exchange services, all of which are subject to strict liability.
A new designated service and register to regulate digital currency exchanges will be established within six months of the bill’s legislation.
The committee’s approach to regulation is aided by a review of the current law, complete with recommendations by the Attorney-General’s Department (AGD).
Citing some concerns toward the six-month timeframe for reforms is the Law Council, which called for guidance on possible exemptions for ‘low value’ transactions below $1,000 at bitcoin exchanges. The Law Council also called the notion imprisonment due to aggravated offences, aside from strict liability offences, between 2-4 years and even up to 7 years in extreme cases as “draconian”.
Pointedly, today’s report pointed to concerns from Australian bitcoin startup Living Room of Satoshi, a payments company that enables Australians to settle their bills with bitcoin. The startup has seen meteoric growth, processing $5 million in household bills with the cryptocurrency since its launch in April 2014.
The bitcoin startup called for an exemption from regulation for low-value payments made with digital currencies under $1,000.
An excerpt from committee’s revisions read:
Living Room of Satoshi submitted that the application of AML/CTF regulations on low value payments would be a significant hindrance to retail businesses that accept payments under $1000 in digital currency form. It submitted that an exemption for low value payments should be included as part of the bill to limit the impact on small businesses.
Ultimately, the committee recommended the bill be passed.