Australia Unveils Draft Guidelines for Crypto Compliance
The Australian government has taken a significant step towards regulating the cryptocurrency industry by releasing new draft guidelines that emphasize the importance of compliance.
These guidelines, issued by the Australian Transaction Reports and Analysis Centre (AUSTRAC), make it clear that adherence to regulatory standards is no longer a choice for crypto businesses operating in the country.
Key Points of the Draft Guidelines
Mandatory Compliance: The draft guidelines stress that compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations is now mandatory for all cryptocurrency service providers in Australia.
Risk Assessment: Crypto businesses are required to conduct thorough risk assessments to identify and mitigate potential vulnerabilities in their operations.
Customer Due Diligence: The guidelines emphasize the importance of robust customer due diligence procedures to prevent illicit activities and ensure transparency in transactions.
Reporting Obligations: Cryptocurrency service providers must adhere to strict reporting requirements, including suspicious transaction reports and threshold transaction reports.
Impact on the Crypto Industry
The introduction of these draft guidelines signals a significant shift in Australia’s approach to cryptocurrency regulation. It demonstrates the government’s commitment to creating a safer and more transparent digital asset ecosystem while aligning with global efforts to combat financial crimes.
Crypto businesses operating in Australia will need to reassess their compliance strategies and potentially invest in new systems and processes to meet these regulatory requirements. This move is expected to enhance the legitimacy of the cryptocurrency sector in the country and provide greater protection for investors and consumers.
Potential Penalties for Non-Compliance
Civil Penalty Orders: AUSTRAC can issue civil penalty orders against companies that do not meet their compliance obligations.
Infringement Notices: Companies may receive infringement notices for each instance of non-compliance, which can lead to financial penalties.
Daily Accrued Fines: For businesses that fail to enroll with AUSTRAC within the required timeframe, penalties can accrue daily. Each penalty unit is currently valued at $313, and businesses may face fines of up to:
$3,756 per day for individuals
$18,780 per day for corporate entities
If a business remains unenrolled for an extended period, such as a year, the total fines could reach:
$1,370,940 for individuals
$6,854,700 for corporate groups.
Remedial Directions and External Audits: AUSTRAC may also require companies to appoint an external auditor to review their compliance practices or conduct a risk assessment related to money laundering and terrorism financing
As the draft guidelines undergo review and consultation, industry stakeholders are encouraged to provide feedback to ensure the final regulations strike a balance between fostering innovation and maintaining financial integrity in the rapidly evolving world of digital assets.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information
