Bitcoin one step closer to being regulated in Australia under new anti-money laundering laws
Bitcoin is one step closer to being regulated in Australia, with Parliament expected to this week vote on a bill to strengthen the nation's anti-money laundering laws.
That was almost a ten-fold surge from last October, when each unit was worth just $803 (or $US630). But even at that lower price, many people thought the digital currency was "over-valued
The proposed laws
If the new laws are passed, the financial intelligence regulator AUSTRAC will be given new powers to police digital currency exchanges — where traders buy and sell Bitcoin, Ethereum and other cryptocurrencies.
These exchanges like Independent Reserve and BTC Markets would need to be registered under the new regime.
It will also become an offence for an "unregistered person" to provide digital currency exchange services.
"Businesses that trade digital currencies for money, and vice versa, will be required to enrol and register with AUSTRAC," Justice Minister Michael Keenan said in a Parliamentary speech about the bill in August.
Mr Keenan said these businesses would need to "establish, implement and maintain an AML/CTF (anti-money laundering and counter-terrorism financing) program".
In addition, they would have to "report threshold transactions and suspicious matters to AUSTRAC, and keep appropriate records".
This is a softer approach compared to China, which banned initial coin offerings (ICOs) last month — a move which led to Bitcoin's value dropping by more than US$1,000 to $US3,226 (on September 14).
Digital currencies and crime
The Australian Criminal Intelligence Commission (ACIC) has been a strong advocate for regulating digital currencies.
"Virtual currencies, such as Bitcoin, are increasingly being used by serious and organised crime groups," ACIC said in its report on Australian organised crime, released in August.
"They are a form of currency that can be sold anonymously online, without reliance on a central bank or financial institution to facilitate transactions."
They can be used on darknet marketplaces like Silk Road 3.0 and Valhalla Marketplace to facilitate the sale and trafficking of illicit drugs, firearms, precursor chemicals and child exploitation materials.
They are also the currency of choice when it comes to cyber attacks.
The hackers behind the Wannacry ransomware attack, which infected nearly 100 countries around the world demanded their ransom be paid with Bitcoin.
That was also the case with the Petya cyber attack in June, which targeted the Cadbury chocolate factory in Tasmania.
But the buying and selling of Bitcoin and similar virtual currencies is currently unregulated in Australia due to a loophole in existing laws.
The loophole is that the term "e-currencies" is defined too specifically in the Anti-Money Laundering and Counter-Terrorism Financing Act.
"E-currencies" are defined as "an internet-based, electronic means of exchange" backed by something physical like a "precious metal" (gold or silver), or "bullion".
This problem was pointed out by the Attorney-General's Department's (AGD) submissions in submissions to the Senate.
In particular, the AGD said this specific definition does not cover Bitcoin. That is because the digital currency is not backed by physical assets at all — but by a "cryptographic algorithm".
full:
http://www.abc.net.au/news/2017-10-23/bitcoin-one-step-closer-to-being-regulated-in-australia/9058582
