Australia launches AML rules for cryptocurrency exchanges

The Australian Transaction Reports and Analysis Centre has set out the new obligations that exchanges must now follow, including identifying and verifying the identities of customers

What has happened?

Cryptocurrency exchanges in Australia must now follow new rules to combat money laundering and terrorism financing.

What does this mean?

The Australian Transaction Reports and Analysis Centre (AUSTRAC), the country's financial intelligence agency, has published a new web page setting out the new obligations, which apply from 3 April.

Exchanges must now meet new obligations, including:

  • adopting and maintaining an anti-money laundering/counter-terrorism financing programme;
  • identifying and verifying the identities of customers;
  • reporting to AUSTRAC suspicious matters, and transactions involving physical currency of AUS$10,000 or more; and
  • keeping certain records for seven years.

There will be a six-month grace period, during which AUSTRAC will be more lenient on operators that fall short of requirements.

“A ‘policy principles’ period of six months will be in place from 3 April 2018. During that period, the AUSTRAC CEO can only take enforcement action if a DCE business fails to take ‘reasonable steps’ to comply,” AUSTRAC said

Transitional registration arrangements will be in place to allow businesses to continue providing services while their registration application is being considered.

However, they must register by 14 May 2018.

AUSTRAC warned exchanges that they may face "criminal offence and civil penalty consequences" if they fail to register.

Next steps

If you want to take advantage of blockchain's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.

John Salmon
Languages English
Topics Blockchain
Countries Australia


© 2020 Hogan Lovells. All rights reserved. "Hogan Lovells" or the “firm” refers to the international legal practice that comprises Hogan Lovells International LLP,Hogan Lovells US LLP and their affiliated businesses, each of which is a separate legal entity. Attorney advertising. Prior results do not guarantee a similar outcome.