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The Australian Government is currently reviewing its regulatory environment for cryptocurrency and other digital assets. On 28 October 2021, the Select Committee on Australia as a Technology and Financial Centre issued a final report with 12 recommendations. Virtual asset service providers (VASPs) - more commonly referred to as crypto secondary asset service providers (CASSPrs) in the region - have largely remained unregulated in Australia to date. Currently, digital currency exchange providers have to register with AUSTRAC and comply with the Australian anti-money laundering and counter-terrorist financing (AML/CTF) regime, as well as capture cryptocurrency trading for the purposes of Capital Gains Tax collection.

Who is the supervisory body for VASPs in Australia?

AUSTRAC is responsible for implementing the guidelines released by the Financial Action Task Force (FATF) on VASPs, in particular, the Travel Rule.

Which regulations are applicable to the Australian Travel Rule?

AML and CFT Act 2006: https://www.legislation.gov.au/Details/C2021C00243

Report: https://parlinfo.aph.gov.au/parlInfo/download/committees/reportsen/024747/toc_pdf/Finalreport.pdf;fileType=application%2Fpdf

When do you need to comply with the Travel Rule in Australia?

The Australian Government is in the process of reviewing its regulatory environment for virtual assets. Thus there is no obligation to comply yet. However, you may need to have a solution in place when interacting with other obliged entities located in countries where the Travel Rule has been implemented. 

Have a plan in place, and start interacting with the right providers that can help you comply with the travel without impairing your customer relationship.

What else do you need to know about the Travel Rule in Australia?

The Committee recommended that:

  • The Government establish a market licensing regime for Digital Currency Exchanges (DCEs), including capital adequacy, auditing and responsible person tests under the Treasury portfolio.

  • The Government establishes a custody or depository regime for digital assets with minimum standards under the Treasury portfolio.

  • The Government conducts a token mapping exercise to determine the best way to characterise the various types of digital asset tokens in Australia.

  • The Government establish a new Decentralised Autonomous Organisation company structure.

  • The Anti-Money Laundering and Counter-Terrorism Financing regulations be clarified to ensure they are fit for purpose, do not undermine innovation and give consideration to the driver of the FATF "Travel Rule".

Written by:
Delphine Forma
Delphine Forma
Senior Compliance Manager at BitMEX

Delphine Forma is an experienced compliance officer who worked across different industries including Bank of Tokyo, Mitsubishi UFJ, HSBC Bank, and crypto businesses (exchanges and miners). She holds a diploma from Sciences Po Lyon, and two masters specialising in European Criminal Business Law and Frauds and Money Laundering Prevention.

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