6th July 2018
Cryptocurrency Regulations in Australia
Cryptocurrency Regulations in
Cryptocurrencies: Legal, treated as property
Cryptocurrency exchanges: Legal, must register with AUSTRAC
Cryptocurrencies, digital currencies, and cryptocurrency exchanges are legal in Australia, and the country has been progressive in its implementation of cryptocurrency regulations. In 2017, Australia’s government declared that cryptocurrencies were legal and therefore subject to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF 2006), section 5 and associated rules. The legislator specifically stated that Bitcoin (and cryptocurrencies that shared its characteristics) should be treated as property and subject to Capital Gains Tax (CGT). Cryptocurrencies had previously been subject to controversial double taxation under Australia’s goods and services tax (GST): the change in tax treatment is indicative of the Australian government’s progressive approach to the crypto issue.In 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced the implementation of more robust cryptocurrency exchange regulations. Those crypto regulations require exchanges operating in Australia to register with AUSTRAC, in compliance with the AML/CTF 2006 Part 6A – Digital Currency Exchange Register. The rule requires entities acting as exchanges, or providing registrable exchange type services, to identify and verify their users, maintain records, and comply with government AML/CTF reporting obligations. The CEO of AUSTRAC maintains the Digital Currency Exchange Register and unregistered exchanges are subject to criminal charges and financial penalties.
In May 2019, the Australian Securities and Investments Commission (ASIC) issued updated regulatory requirements for both initial coin offerings (ICOs) and cryptocurrency trading. Similarly, in August 2020, Australian regulators forced many exchanges to delist privacy coins, a specific type of anonymous cryptocurrency.
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