According to the Australian Government, AUSTRAC released new regulatory guidelines on how cryptocurrency exchanges are allowed to operate. The difficulty to trace cryptocurrency transactions has made money laundering effortless, raising concerns all over the world.
Given the CRA’s recent crackdown on Initial Coin Offerings and declaration of capital gains, the question becomes, will Canada follow Australia’s lead? Is a unified global approach even possible? Effective April 3rth 2018, exchanges are obligated to meet the following requirements to combat money laundering and counterterrorist financing (CTF):
Adopt and maintain an AML/CTF program to identify, mitigate, and manage money laundering and terrorism financing risks; identify and verify the identities of their customers; report to AUSTRAC suspicious matters and transactions involving physical currency of $10,000 or more, and keep certain records for seven years.
“It’s not surprising that AML rules are applying to businesses in blockchain and cryptocurrency. Australia’s updates move closer to regulatory requirements that are already in place in the U.S. ($10K reporting threshold vs AUD 10K ~ USD 7K in 2014). The Polymath platform was designed with these regulations in mind, as a proactive approach to regulators is more productive in the long-term.” – Rachel Lam, VP of Regulatory Strategy at Polymath
Companies providing digital currency exchange services, such as Coin Loft and BuyaBitcoin, will need to register with AUSTRAC by May 14th, 2018. If a digital currency exchange provides services without being registered first, that would be a criminal offense and civil penalty consequences will be implemented.
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