After abolishing double taxation on cryptocurrencies, authorities in Australia have turned their attention to revising the current Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF), which has been on the back burner since 2016.
A bill was tabled in the Parliament in April 2016 seeking to amend the AML/CTF Act to include regulating activities relating to digital currency in addition to expanding the definition of “e-currency” to include digital currencies that are not backed by a physical asset.
On Monday, the Senate Legal and Constitutional Affairs Legislation Committee finally gave the green light to the proposal. The committee made only two recommendations: to clarify some definitions, and to pass the bill.
“On balance, the committee considers that the bill would bring about an improvement in the operation of the AML/CTF Act, and thereby assist in Australia’s efforts to combat money laundering and terrorism financing, and so should be passed,” the committee stated in its report.
In the committee’s recommendations, regulating digital currency exchange operators will fall under the purview of the Australian Transactions and Reporting Analysis Centre (AUSTRAC), the country’s financial intelligence financial intelligence agency. If passed, the bill will empower AUSTRAC’s chief executive to “make rules to expand or narrow the scope of the digital currency definition.”
The bill also introduces a number of civil penalties for unregistered operators of digital currency exchanges, which range from two-year jail time and 500 penalty units to up to seven years of imprisonment and a fine of 2,000 penalty units. One penalty unit has recently been increased to A$210, which means that the maximum fine could reach up to A$420,000.
The senate committee also addressed the potential uncertainties resulting from the changes to definitions. In their report, the committee said the government needs to consider whether the terms “article,” “stored value card” and “in the course of carrying on a business” in the bill and Explanatory Memorandum could be better defined.
“The committee understands that the bill’s provisions would be the first phase in a multi-staged effort to update the Commonwealth anti-money laundering and counter-terrorism financing regime. As has been demonstrated by previous Senate committee reports, the Productivity Commission’s report and the Statutory Review into the AML/CTF Act, these reforms are sorely needed in order to adequately reflect the role digital currency plays in the modern society,” according to the report.