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Australia has finally implemented new legislative guidelines aimed at regulating digital currency exchange businesses in the land down under. Enacted on Tuesday, the new regulations will require cryptocurrency exchanges in the country to comply with requirements outlined in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AMF/CFT).

Under the new regulations, domestic exchanges are required to adopt and maintain an AMF/CFT program in their operations. This program will identify, mitigate and manage money laundering and terrorism financing risks. The program will also identify and verify their customers’ identities. A complete Know Your Customer (KYC) system will help in accountability of both digital currency exchanges and the customers, according to Australian authorities.

The cryptocurrency exchanges are also expected to report to Australian Transaction Reports and Analysis Centre (AUSTRAC) any suspicious matters, and transactions involving physical currency of AUD10,000 or more. They are also expected to keep records of their operations, including AML/CTF policies, for seven years.

A six-month period of ‘policy principle’ was put in place and became effective on Tuesday. During this period the CEO of AUSTRAC can only take enforcement actions if acryptocurrency exchange fails to take reasonable steps to comply with the setlaws. In the same period, a transitional regulation arrangement will be made for the already existing businesses. This is meant to allow the businesses to continue with their operations while their registration applications are being reviewed.

All owners of businesses providing cryptocurrency exchange services in Australia are expected to have registered their companies by May 14. AUSTRAC said failure to adhere to the new law would result in criminal and civil penalties, and non-compliant operators could face various fines and up to seven years imprisonment. AUSTRAC also has the powers to issue an infringement notice to any cryptocurrency exchange business which will not comply with the set obligations.

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