Australian Agency, AUSTRAC, Registers 246 Bitcoin Exchange Platforms
The government of Australia, through The Australian Transaction Reports and Analysis Centre (AUSTRAC), has formally enlisted two hundred and forty-six trading platforms.
Digital assets that are considered as securities are now required to enlist with AUSTRAC so as to operate legally. The move by financial intelligence agency is in a bid to regulate how citizens trade their digital assets.
The registration process for bitcoin exchanges is similar to banks or other financial institutions. It includes background checks, KYC practices, and anti-money laundering procedures on the involved parties. The process may also involve, establishing and implementing a compliance program for specific issues.
AUSTRAC Registration To Strengthen Anti-Money Laundering Programs
AUSTRAC has been carefully watching and monitoring the crypto market for some time. In April 2018, the newly amended anti-money laundering and counter-terrorism laws took effect.
The law has made it compulsory for all crypto exchanges to register with the regulatory agency.
In accordance with published news by ABC, AUSTRAC, 11 crypto trading exchanges have been under scrutiny since the implementation of the new laws, out of which two were declined. Details as to why they were denied were not revealed.
The exchanges were given a grace period until October to conform to the rules. This included verifying their clients, report suspicious matters or dealings that may be connected to terrorist funding or money laundering.
In the report, an anonymous official from AUSTRAC issued a stern warning to those who would not comply. He stated that those operating an unregistered exchange will be prosecuted for a criminal offence.
A Great Step Towards Legitimacy
Crypto regulation move in Australia has received backing from participants in the industry.
One Phillippa Ryan, a digital asset researcher at the University of Technology in Sydney, stated that the obligatory registration exercise will delegitimize the shoddy operators and remain with authentic blockchain projects and enterprises.
She reasoned out that, illegitimate trading platforms create public mistrust in cryptocurrencies. The crypto industry has experienced a series of hacks that led to millions of dollars in losses and investors are worried about the safety of their assets which are in the exchanges’ custody.
Adrian Przelozny, the head of Independent Reserve, a local digital asset exchange platform, said that the regulation is very significant in bringing cryptocurrency into the mainstream. He went on to add that, a few years ago, anyone could start their own exchange because there were no proper guidelines in place. As such, the consumer was left to do his/her own investigations as to whether the exchange they are dealing with is efficient and trustworthy.
Despite the genuine uses of cryptocurrencies, it is estimated that at least 50% of all cryptocurrency trade is for criminal activity linked to the darknet.
Other elements that may have led to the decision by AUSTRAC to regulate exchanges was the reports of potential scams. Last year, the agency received 6000 reports on investment scams which resulted in a loss of over $9.5 million. Concerns were also raised about initial coin offerings (ICOs) and some ended up being get-rich-quick schemes.