AUSTRAC has implemented the first laws for cryptocurrency service providers operating in Australia as the financial intelligence agency looks to mitigate criminal risk in the sector.
AUSTRAC's new suite of cryptocurrency laws will regulate digital currency exchange providers. The laws ensure these exchanges now face the same regulatory requirements of other regulated financial institutions under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, requiring financial institutions to monitor transactional activity and report suspicious actions to AUSTRAC, or movements of cash over $10,000.
AUSTRAC chief executive officer Nicole Rose said the new regulation will instill public confidence in the fledgling sector.
"It's recognised that this reform will help protect their business operations from money laundering and terrorism financing, while regulation will also help strengthen public and consumer confidence in the sector," she said.
"AUSTRAC now has increased opportunities to facilitate the sharing of financial intelligence and information relating to the use of digital currencies, such as bitcoin and other cryptocurrencies, with its industry and government partners."
The laws are subject to a transition period until 14 May 2018, ensuring that current digital currency providers are allowed time to register.
The regulations arrive amidst the backdrop of allegations levelled at the Commonwealth Bank in 2017 for not complying with AML/CTF regulations on more than 50,000 occasions.
AUSTRAC alleges that CBA did not report cash deposit transactions of $10,000 or more, contravening the act in the period between 2012 and 2015.