[2018-08-17] Australia follows Japan in move to regulate bitcoin

[ivanpoldark]

   Australia plans to strengthen its anti-money laundering laws and regulate digital currencies such as bitcoin in the wake of a financial scandal involving its biggest bank, Commonwealth Bank of Australia.

Under reforms published on Thursday, Canberra would bring digital currency exchanges under the remit of Austrac, Australia’s financial crime fighting agency.

New legislation would also bolster the investigation and enforcement powers of Austrac, which earlier this month initiated a civil legal action against CBA for alleged breaches of laws on money laundering and the financing of terrorism.

“Stopping the movement of money to criminals and terrorists is a vital part of our national security defences and we expect regulated businesses in Australia to comply with our comprehensive regime,” said Michael Keenan, Australia’s justice minister.

He said the reforms were balanced, dealing with the threat of organised crime and the financing of terrorism while ensuring that excessive regulation did not hinder legitimate financial sectors.

The proposed regulatory shake-up marks the first stage of a reform process aimed at updating Australia’s anti-money laundering and counter-terrorism financing law. It follows a high-profile money laundering scandal involving CBA, which was accused by Austrac this month of more than 50,000 breaches of the existing legislation.


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   https://www.ft.com/content/4cd5cc3c-8309-11e7-a4ce-15b2513cb3ff

   Australia’s move to regulate cryptocurrencies, including bitcoin, follows a similar move by Japan. Under new rules introduced by Tokyo this year any bitcoin or “alternative coin” exchange or money transfer business that wants to operate must come under the regulatory supervision of the Japan Financial Services Agency by October 1.

In Japan, which was the first national government to take such action, exchanges may be given annual audits and are subject to “know your customer” anti-money laundering regulations.

Tokyo’s decision to regulate bitcoin follows the 2014 bankruptcy of Mt Gox — the world’s largest virtual currency exchange. Some 850,000 bitcoins from Mt Gox disappeared before its collapse — worth almost $3.5bn at today’s price of $4,080.

By regulating the currency, Japan has officially recognised bitcoin as a legal method of payment, a move that analysts say has helped the price of bitcoins surge to record highs.

The Australian reforms will also increase the search and seizure powers of police and customs officers at the border.

Mr Keenan said they would also provide regulatory relief to industry through the deregulation of low-risk industry sectors.

“The bill provides net regulatory relief to industry of A$36m annually, with the digital currency exchange sector being regulated for the first time, while deregulating low-risk industries such as cash-in-transit, which is already subject to state and territory licensing requirements.”

https://www.ft.com/content/4cd5cc3c-8309-11e7-a4ce-15b2513cb3ff

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[1Referee]

Within a few years from now, I am quite sure that most of the modern economies will have done the same. Negative aspect is that exchanges and services will require all sorts of personal information. Funny thing is that in quite some cases you can't withdraw any funds unverified, but you can deposit them. Result is that people end up in a big disappointment because their funds are stuck/frozen until verification is completed. In that regard, exchanges shouldn't be accepting incoming deposits from unverified accounts, it's that simple. In current form, this is even misleading, but obviously, exchanges do this on purpose to trap in user funds.

[Slow death]

Negative aspect is that exchanges and services will require all sorts of personal information. Funny thing is that in quite some cases you can't withdraw any funds unverified, but you can deposit them. Result is that people end up in a big disappointment because their funds are stuck/frozen until verification is completed. In that regard, exchanges shouldn't be accepting incoming deposits from unverified accounts, it's that simple. In current form, this is even misleading, but obviously, exchanges do this on purpose to trap in user funds.

There's always a way to steal from us.

the first stage of a reform process aimed at updating Australia’s anti-money laundering and counter-terrorism financing law.

This will not be good, many governments abuse their power to arrest anyone and not give them the opportunity to defend themselves and everything because of national security (terrorism).

[iram1011]

Governments have found a new way. When they aren't able to ban or kill Bitcoin, they are regulating and taxing it. Thus, ensuring a give and take relationship with Bitcoin. Government would be controlling exchanges and thus having a watch over transactions and identity. In one sense it would help in curbing illegal use of Bitcoin(which is what they are claiming) but then it is threat to ultimate feature of Bitcoin i.e. anonymity.

[Maheshkumar_Hrangkhawl]

Governments have found a new way. When they aren't able to ban or kill Bitcoin, they are regulating and taxing it. Thus, ensuring a give and take relationship with Bitcoin. Government would be controlling exchanges and thus having a watch over transactions and identity. In one sense it would help in curbing illegal use of Bitcoin(which is what they are claiming) but then it is threat to ultimate feature of Bitcoin i.e. anonymity.

Some of the governments, and not all. Less than a dozen nations have fully legalized Bitcoin till now. Unfortunately, as you said, we can say goodbye to anonymity, but this is the price that we need to pay for support from the government.

[Kprawn]

They know it cannot be totally banned, so they are finding ways to accommodate it within their "rules" .... The KYC/AML

regulations applied to exchanges are already one step towards regulating Bitcoin and now they are taking it one step

further by regulating the merchants that accept bitcoins as a payment option. It is good and bad.  They acknowledge it

as a currency, but they want it to operate within their control. 

[bouren]

Governments have found a new way. When they aren't able to ban or kill Bitcoin, they are regulating and taxing it. Thus, ensuring a give and take relationship with Bitcoin. Government would be controlling exchanges and thus having a watch over transactions and identity. In one sense it would help in curbing illegal use of Bitcoin(which is what they are claiming) but then it is threat to ultimate feature of Bitcoin i.e. anonymity.

Some of the governments, and not all. Less than a dozen nations have fully legalized Bitcoin till now. Unfortunately, as you said, we can say goodbye to anonymity, but this is the price that we need to pay for support from the government.

In my views, regulating the bitcoin is a welcome move. Most of the businesses who think about integrating bitcoin back out due to its anonymity. They don't know how to show bitcoins in their balance sheet, whether as liquid cash or asset. So if bitcoin gets backed by government and comes under tax circle, businesses will be free to show them in the way they want. Hence bitcoin's use will increase which in turn increase the demand that ultimately shoot the price up.

[erikalui]

Glad that after Japan, Australia too went on to accept bitcoins though I do not see the currency being accepted on a wide scale in Australia. Japan's market volume is the highest and hence the decision was taken considering the same. The decision of regulation was probably taken to reduce the crime associated with bitcoins not be regulated and the best part is they exempted GST being charged on bitcoins. They aren't penalizing those who use this currency with heavy taxes which is much appreciated.

[iamTom123]

He said the reforms were balanced, dealing with the threat of organised crime and the financing of terrorism while ensuring that excessive regulation did not hinder legitimate financial sectors.

I am hoping that the government would really be careful that in controlling the inflow and outflow of money for illegal or criminal purposes they are not also trampling on legal transactions involving the digital currencies. I have no problem with this if they would follow the example set by Japan which is now considered one of the most influential and powerful Bitcoin market. In the end, we really have to compromised a little with the government as it is still them that get the power to formulate and implement laws. This is much better than to have anarchy where laws are not existing and nobody is following. Hope that this can really lead to a bigger market for Bitcoin and all the other digital currencies in Australia.

[richardsNY]

At first people were extremely happy with this type of news, but countries legalizing Bitcoin will more and more become like a normal thing nowadays. I am mainly excited because this will be a major door opener when it comes to making it interesting for institutions to start pumping money into Bitcoin directly, or through whatever financial instruments where they don't directly own any coins. I am very proud that we have come this far -- it wasn't all that long ago (2015'ish) where the sentiment was probably on an all time low. Current times are the exact opposite, where the sentiment is on an all time high.

[Taki]

Within a few years from now, I am quite sure that most of the modern economies will have done the same. Negative aspect is that exchanges and services will require all sorts of personal information. Funny thing is that in quite some cases you can't withdraw any funds unverified, but you can deposit them. Result is that people end up in a big disappointment because their funds are stuck/frozen until verification is completed. In that regard, exchanges shouldn't be accepting incoming deposits from unverified accounts, it's that simple. In current form, this is even misleading, but obviously, exchanges do this on purpose to trap in user funds.

Australia - the country and the continent.
I am agree with you about this acceptance and regulation will be the example to other countries tojoin Bitcoin. But I don't see anything bad in uncovering some private information. Some wallets and exchangers have used this function already. I think this fact will make the system more open and safe. But todo so they will need to organize some super protection for such kindof information. Add to that I suppose they will push us to pay taxes from this digital profit as well.

[ALT67890]

I can't say bad things about it, the government is mandated by their citizens to regulate anything that are prone to abused and criminal acts. But that government must be accountable that they might not mixed their duties as public servants with personal interest that might affect the regulation and may cause for conflict of interest and corruption.
Japan has this altitude of "harakiri" and i hope Australia knows about it and follow.

[AlexandrInt]

I can't say bad things about it, the government is mandated by their citizens to regulate anything that are prone to abused and criminal acts. But that government must be accountable that they might not mixed their duties as public servants with personal interest that might affect the regulation and may cause for conflict of interest and corruption.
Japan has this altitude of "harakiri" and i hope Australia knows about it and follow.

I also have the hope that the regulation of bitcoin in Australia will not lead to negative consequences. The government should remember that bitcoin is an independent system that is difficult to control. The most important thing is that the Australian government does not impose large taxes on the exchange of bitcoin for fiat

[irsada]

Australia's decision to legalize bitcoin is appropriate.
They minimize the crime and negative effects of bitcoin.
I hope in my country also made a rule like this.
So everything is safe and under control.

[veleten]

this is going to make Primedice owners happy,haha
regulating bitcoin will have it legal status approved,although it is yet unknown how will it be regulated in Australia in particular
so far they are more concerned about control over money laundering,rather then increasing adoption rates
or trying to make bitcoin equal fiat money,in any case this move is great for bitcoin and I hope more countries will follow

[CyberKuro]

Within a few years from now, I am quite sure that most of the modern economies will have done the same. Negative aspect is that exchanges and services will require all sorts of personal information. Funny thing is that in quite some cases you can't withdraw any funds unverified, but you can deposit them. Result is that people end up in a big disappointment because their funds are stuck/frozen until verification is completed. In that regard, exchanges shouldn't be accepting incoming deposits from unverified accounts, it's that simple. In current form, this is even misleading, but obviously, exchanges do this on purpose to trap in user funds.

Obviously, it's always easier to deposit and harder to withdraw what belongs to you
In that case, everyone should verify their id to get full access on local exchanges but I do not recommend to deposit-send so much money-btc into trading platforms such as bittrex or poloniex.

The best way to get more acceptance from citizens is government should regulate bitcoin and exchanges, but the best part is govs can't track all of your wallet as long as it doesn't connected to exchanges. However, exchanges mean to be a third party to convert your money, so do not deposit or send bitcoin into which you can't afford to lose, just in case something happen.

[kevpantof]

   Australia plans to strengthen its anti-money laundering laws and regulate digital currencies such as bitcoin in the wake of a financial scandal involving its biggest bank, Commonwealth Bank of Australia.

Under reforms published on Thursday, Canberra would bring digital currency exchanges under the remit of Austrac, Australia’s financial crime fighting agency.

New legislation would also bolster the investigation and enforcement powers of Austrac, which earlier this month initiated a civil legal action against CBA for alleged breaches of laws on money laundering and the financing of terrorism.

“Stopping the movement of money to criminals and terrorists is a vital part of our national security defences and we expect regulated businesses in Australia to comply with our comprehensive regime,” said Michael Keenan, Australia’s justice minister.

He said the reforms were balanced, dealing with the threat of organised crime and the financing of terrorism while ensuring that excessive regulation did not hinder legitimate financial sectors.

The proposed regulatory shake-up marks the first stage of a reform process aimed at updating Australia’s anti-money laundering and counter-terrorism financing law. It follows a high-profile money laundering scandal involving CBA, which was accused by Austrac this month of more than 50,000 breaches of the existing legislation.


   Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
   https://www.ft.com/content/4cd5cc3c-8309-11e7-a4ce-15b2513cb3ff

   Australia’s move to regulate cryptocurrencies, including bitcoin, follows a similar move by Japan. Under new rules introduced by Tokyo this year any bitcoin or “alternative coin” exchange or money transfer business that wants to operate must come under the regulatory supervision of the Japan Financial Services Agency by October 1.

In Japan, which was the first national government to take such action, exchanges may be given annual audits and are subject to “know your customer” anti-money laundering regulations.

Tokyo’s decision to regulate bitcoin follows the 2014 bankruptcy of Mt Gox — the world’s largest virtual currency exchange. Some 850,000 bitcoins from Mt Gox disappeared before its collapse — worth almost $3.5bn at today’s price of $4,080.

By regulating the currency, Japan has officially recognised bitcoin as a legal method of payment, a move that analysts say has helped the price of bitcoins surge to record highs.

The Australian reforms will also increase the search and seizure powers of police and customs officers at the border.

Mr Keenan said they would also provide regulatory relief to industry through the deregulation of low-risk industry sectors.

“The bill provides net regulatory relief to industry of A$36m annually, with the digital currency exchange sector being regulated for the first time, while deregulating low-risk industries such as cash-in-transit, which is already subject to state and territory licensing requirements.”

https://www.ft.com/content/4cd5cc3c-8309-11e7-a4ce-15b2513cb3ff

That’s not too good but its okay,  I think the highest amount of bitcoins are purchased in Japan, so the government regulating it and Australia regulating it too isn’t a big deal, since bitcoin encourages corruption they have no choice