Australia closer to regulating Bitcoin

[uartasic]

www.abc.net.au/news/2017-10-23/bitcoin-one-step-closer-to-being-regulated-in-australia/9058582

The wheels sure do move slowly over here but they do move.


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.

Key points:

New laws part of Government's efforts to combat money laundering and terrorism financing
AUSTRAC would be given new powers to monitor digital currency exchanges
These exchanges would be required to identify customers more stringently and report suspicious transactions
The value of the controversial cryptocurrency's hit its all-time high on October 21, with each Bitcoin trading at $7,467 (or $US6,149).

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.

Bitcoin explained


Can't tell a bitcoin from a blockchain? Read our explainer to see how the cryptocurrency works.
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".

"This regulatory gap is also having an impact on the legitimacy and public perception of the digital currency sector, which may impede developments or the use of these currencies in the future," the AGD said.
A mixed industry response

There is a "legacy stigma" with digital currencies, and that people unfortunately associate Bitcoin with crime, Independent Reserve's director Lasanka Perera said.

"These new laws would be good for the industry, it will give more confidence to investors, consumers and businesses to enter the industry," he said.

But some digital currency businesses believe that the anti-money laundering bill imposes unduly harsh obligations.

"The proposed legislation will have the effect of requiring KYC [Know Your Customer] procedures of our customers for even very small transactions," said Daniel Alexiuc, who runs an online business called Living Room of Satoshi.

He said this includes small transactions like "paying your phone bill or buying a banh mi (Vietnamese bread roll) for lunch".

Through Mr Alexiuc's website, customers can use Bitcoin and 10 other cryptocurrencies to pay their household bills — as long as they have BPAY facilities like ANZ Bank, Optus and Australia Post.

Mr Alexiuc made submissions to the Senate's legal affairs committee arguing that there should be an exemption for payments under $1,000.

His concern is, under the proposed laws, he would be required to ask his customers to provide photo identification before they register for an account.

"It will kill our retail payment system, and these new laws are completely unfeasible," he said.
The law currently does not require digital currency exchanges to conduct an identification check on customers who open accounts

However, some of the operators who spoke with the ABC said they, nevertheless, ask for "100 points of ID" from their customers because it is "best practice".

The imposition of new regulations on digital currency exchanges may also impose high entry barriers to new entrants.

"There is likely to be an ongoing expensive compliance cost, particularly in regards to ongoing transaction monitoring," said BTC Markets' director Jarrod Crane, who is supportive of the proposed laws.

However, he conceded that: "If this regulation was around in 2013, we probably wouldn't have been able to start our business."

Topics: business-economics-and-finance, regulation, currency, australia

First posted 23 Oct 2017, 3:11am

[1714130935]

1714130935

[Iranus]

The wheels sure do move slowly over here but they do move.

You seem to be suggesting that this is a positive move.  It might be good when governments are clear on their exact views on BTC, because it shows that their position is unlikely to get unreasonable or severe, but it's still a layer of inconvenience for people who want to get involved in BTC.

Regulation of exchanges can be quite annoying for users, especially when it requires serious invasion of privacy like questioning the usage of funds.

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 can also be used in legal and legitimate markets.  Crime is just a side effect of a good monetary system.

[frankbitcoin]

The wheels sure do move slowly over here but they do move.

You seem to be suggesting that this is a positive move.  It might be good when governments are clear on their exact views on BTC, because it shows that their position is unlikely to get unreasonable or severe, but it's still a layer of inconvenience for people who want to get involved in BTC.

Regulation of exchanges can be quite annoying for users, especially when it requires serious invasion of privacy like questioning the usage of funds.

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 can also be used in legal and legitimate markets.  Crime is just a side effect of a good monetary system.

Yep, well said.

I'd love to know how many people deal in cash that commit crimes with said cash.  Or who trade oil for crimes.  Or anything, really.  Crime will always exist, regardless of what payment of method is issued.

[iSkyCastle]

It would be a good news that countries are starting to regulate bitcoin. It only means that bitcoin is gaining approval.

[Hermes Mercury]

In my opinion just like Australia, all countries that accept bitcoin and crypotomoedas, will be closer to the future more technologically

[Geemy]

if it done , it will be a good step to make Bitcoin more legally in worldwide .

[uartasic]

I feel yes and no, its a good thing.

Main message i wanted to put across is even Australia are looking at it with maturity and not a craze brought onto us by our US cousins.

As the kids these days, the government sees that Bitcoin is a "thing" that cannot be ignored and requires attention as it seems to not be going away anytime soon.

The criminal element of the article is laughable, i concede and always have, as i have not come across a criminal who has refused money

For the cardigans this side of the world what the regulation means to them is, "well its regulated, lets get in on it, surely the government wont spend their time on nonsense so its worth a look in.."

People will make of it what they may. I hope it leads to a better adoption and a better bitcoin ecosytems the likes of what CoinJar and LivingRoomOfSatoshi have brought us over here.

The wheels sure do move slowly over here but they do move.

You seem to be suggesting that this is a positive move.  It might be good when governments are clear on their exact views on BTC, because it shows that their position is unlikely to get unreasonable or severe, but it's still a layer of inconvenience for people who want to get involved in BTC.

Regulation of exchanges can be quite annoying for users, especially when it requires serious invasion of privacy like questioning the usage of funds.

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 can also be used in legal and legitimate markets.  Crime is just a side effect of a good monetary system.

[Aufar]

Like children these days, the government sees that Bitcoin is a "thing" that can not be ignored and needs attention because it does not seem to be going anytime soon.

People will make it as it is. I hope this leads to a better adoption and a better Ecosytem Bitcoin than what Coin Jar and Living Room Of Satoshi have brought us here.

The message I want to convey is that Australia views it with maturity.

[gabmen]

Like children these days, the government sees that Bitcoin is a "thing" that can not be ignored and needs attention because it does not seem to be going anytime soon.

People will make it as it is. I hope this leads to a better adoption and a better Ecosytem Bitcoin than what Coin Jar and Living Room Of Satoshi have brought us here.

The message I want to convey is that Australia views it with maturity.

Right. It just means that australia is ready for the future and is willing to take the forefront for a crypto revolution. In the long run, australia and japan will greatly benefit for being the firsts to give btc a legal chance

[jseverson]

How do they know what criminal organizations are increasingly going into Bitcoin? Wouldn't that be impossible to say for certain without the regulations in place? They're passing these regulations because they haven't started watching transactions after all. It just seems like a dangerous assumption.

Either way, these regulations seem fair. It would be better for Bitcoin as a whole if it can cleanse its name of crime.

[hessanseen]

Supervision is a good thing, but it must be the right regulation, find some bitcoin, understand the chain of chain technology to do supervision, is the most reasonable. Indeed, bitcoin is now used in many fields, and many people prefer bitcoin when it is illegally traded, because it is completely anonymous, which weakens the functionality of the country. Control of every country will not want their country banknotes are bitcoin replaced.

[bubblebit]

Australia closer to regulating Bitcoin

Regulation is a must when it comes to bitcoin, in my opinion. Why? Because the reality that most criminal minded individuals are into it, especially that it’s prices is surging up this years. Australia as a country with great laws this is not to be worried. As long you go and work legally but if you do the different way then you are open for punishment.

It is the choices we made that make as a better person and we should follow what the government thing is best for its people. But in time that abuses will be dominant on they’re side it’s our decision to criticise they’re actions.

[vinc3]

www.abc.net.au/news/2017-10-23/bitcoin-one-step-closer-to-being-regulated-in-australia/9058582

The wheels sure do move slowly over here but they do move.


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.

Key points:

New laws part of Government's efforts to combat money laundering and terrorism financing
AUSTRAC would be given new powers to monitor digital currency exchanges
These exchanges would be required to identify customers more stringently and report suspicious transactions
The value of the controversial cryptocurrency's hit its all-time high on October 21, with each Bitcoin trading at $7,467 (or $US6,149).

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.

Bitcoin explained


Can't tell a bitcoin from a blockchain? Read our explainer to see how the cryptocurrency works.
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".

"This regulatory gap is also having an impact on the legitimacy and public perception of the digital currency sector, which may impede developments or the use of these currencies in the future," the AGD said.
A mixed industry response

There is a "legacy stigma" with digital currencies, and that people unfortunately associate Bitcoin with crime, Independent Reserve's director Lasanka Perera said.

"These new laws would be good for the industry, it will give more confidence to investors, consumers and businesses to enter the industry," he said.

But some digital currency businesses believe that the anti-money laundering bill imposes unduly harsh obligations.

"The proposed legislation will have the effect of requiring KYC [Know Your Customer] procedures of our customers for even very small transactions," said Daniel Alexiuc, who runs an online business called Living Room of Satoshi.

He said this includes small transactions like "paying your phone bill or buying a banh mi (Vietnamese bread roll) for lunch".

Through Mr Alexiuc's website, customers can use Bitcoin and 10 other cryptocurrencies to pay their household bills — as long as they have BPAY facilities like ANZ Bank, Optus and Australia Post.

Mr Alexiuc made submissions to the Senate's legal affairs committee arguing that there should be an exemption for payments under $1,000.

His concern is, under the proposed laws, he would be required to ask his customers to provide photo identification before they register for an account.

"It will kill our retail payment system, and these new laws are completely unfeasible," he said.
The law currently does not require digital currency exchanges to conduct an identification check on customers who open accounts

However, some of the operators who spoke with the ABC said they, nevertheless, ask for "100 points of ID" from their customers because it is "best practice".

The imposition of new regulations on digital currency exchanges may also impose high entry barriers to new entrants.

"There is likely to be an ongoing expensive compliance cost, particularly in regards to ongoing transaction monitoring," said BTC Markets' director Jarrod Crane, who is supportive of the proposed laws.

However, he conceded that: "If this regulation was around in 2013, we probably wouldn't have been able to start our business."

Topics: business-economics-and-finance, regulation, currency, australia

First posted 23 Oct 2017, 3:11am

The thing about regulation is that it brings morr acceptance especially for those who are in doubt whether its legal or not. Such a wise act on the part of the australian government for bitcoin is jut getting started who would have thought that this technology would tak world by storm nd change a lot of lives around the globe, not just in financial aspect but also in overall way of living those who supports it. We are just witnessing the beginning of a new era, and I myself won't let myself and my family be left behind.

[Peter789]

I belong to everal Australian cryptocurrency exchanges and In each case i had to provide much ID , address checks, phone numbers and bank account checks. About 6 months at least.

KYC is good for btc. I also know that if anything goes wrong I can rely on Australian legal authorities to act.
I also have receipts for all my coins.

[marcbitcoins]

In my opinion just like Australia, all countries that accept bitcoin and crypotomoedas, will be closer to the future more technologically

Regulations is very important because all bitcoin transactions activities will now be monitored to prevent it of using it to illegal activities such as scams, money laundering, drugs and explosives. If every huge bitcoins to exchanges transactions will not be monitored we don't know if someone already will use it to destroy the country, to put the life of the people at risk or even to scam the people of their hard work money and that is why ICO will surely will be included  too of all regulating.

[Lm2e4]

I must say that Australia's regulation will makes bitcoin image look more good than before. This regulation is a good move for Australia's citizen to decrease their doubts on bitcoin if they think bitcoin is not safe. And I also think that it might add new members in our community!

[cengsuwuei]

i think is big news if australia true regulated bitcoin
but if baned ico same with china, and exchanger close same china i think is not good
regulated must effect bitcoin user is easy use bitcoin and safe

[Granxis]

We are also expecting Switzerland's similarity to the Austrian regulation. What do the banks think of Switzerland, Bitcoin? When there are no cash in the banks, the bankers will look for other jobs.

[megynacuna]

We are also expecting Switzerland's similarity to the Austrian regulation. What do the banks think of Switzerland, Bitcoin? When there are no cash in the banks, the bankers will look for other jobs.

They better do as there are many more opportunities associated with bitycoin and these banks can transform themselves into exchanges  for bitcoin and cryptocurrencies. Switzerland, Australia among others are just adding up to the global call for the regularization and adoption of bitcoin and it's in the right direction.

[teejayrichard2]

If Australia regulates bitcoin then it will be a great encouragement to other countries to do so thereby making bitcoin stronger than it is already. We look forward to that

[AntonioE]

It's happening and it other countries will follow. This is what needs to happen.

[ltcatcher88]

True, i think bitcoin will be regulated in other countries as well, as long as it`s price will grow so rapidly.

[YuginKadoya]

True, i think bitcoin will be regulated in other countries as well, as long as it`s price will grow so rapidly.

In time I think there are preparations needed for a country to sure accept bitcoin and there are legal papers that needs to sign and accept by the government, and I really think a government leader must have an open mind towards this kind of innovative move, and because of the new all time high of the value of bitcoin many country is noticing it and thinking for it to be approve, they are just hesitant because some crooks or criminals are really using it,

[Kingofbitcoin12345]

It's happening and it other countries will follow. This is what needs to happen.

This regulation issue is much of a concern for some bitcoin enthusiast but not with me.. Australia has make a good move than China closing exchange,, right? Seems most of or majority of the bitcoin community is not against the government regulating cryptocurrency because they are more against corrupting the market by government officials who have self interest and black motives..

[q835197677]

Well, I think something bad is happening.I think the Australian government might have a very high transaction tax on bitcoin, which is used to discourage speculation, because bitcoin can be used for money laundering and crime.

[DIW]

For governments to be seriously looking into regulating crypto assets is a positive development since it seems that these assets are now becoming a noticeable force into the global market.
It is a shame that crypto assets are regularly connected with crime though, as if crime didn't exist before crypto assets came about and as if crime related payments were not taking place before.
Everyone within the crypto community needs to make sure that the message is passed onto the real world: Crypto assets are here to stay and they are not responsible for global crime.

[googs84]

According to Australian government control of digital currencies is part of drive to strengthen money-laundering rules. Money laundering and terror financing is showing signs in Australia creating issue of national security. As a result they have decided to bring digital currency exchanges under Australia's crime fighting agency Austrac. With this move Australia will join countries like China, Japan, Indonesia who also decided to regulate bitcoin transactions.

[Theb]

Some good news here, this is some "If you can't beat them join them" scenarios which the government seen that Bitcoin being popular in their country is inevitable that limiting the usage of such cryptocurrency will only damage their country. Good thing is they adapt it and used it to their advantage, using their police powers to monitor and regulate all exchanges is a big step in order to avoid big crimes which is one of their main concerns. Having able to facilitate these kinds of transactions will be crucial to their success.

[dreamer81]

THe governments that wants to regulate bitcoin will loose in the long run. They are merely products of incompetent politicians, that can't see past their own nose tip. They really dont know how the world is spinning, which is why they think they can regulate all.

Japan has allready accepted bitcoin, which is why japan will be in the top 5 richest worlds in 20 years.

[gz1derbread]

This is a huge step forward for bitcoin, if even such a distant continent, Australia, will use bitcoin. And Australia will become much closer to us, money transactions with this country will be much more convenient.

[uartasic]

I belong to everal Australian cryptocurrency exchanges and In each case i had to provide much ID , address checks, phone numbers and bank account checks. About 6 months at least.

KYC is good for btc. I also know that if anything goes wrong I can rely on Australian legal authorities to act.
I also have receipts for all my coins.

I had to do the whole 9 yards with CoinJar also with ID.

I use my swipe card from CJ quite a bit for lunch and coffee and easily draw down on my BTC balance. I also have the touch app for QR transactions too.

As some have quoted here quite positively, regulation is the signal of acceptance. Acceptance for Bitcoin is a good thing.

Its going nuts in Australia along with Crypto in general. The newer generation of adults concede "..its a thing.."

[trungnhatnguyen06]

Well, In my country, Vietnam, The State Bank issued a notice banning the use of bitcoins and similar virtual currency in Vietnam.

According to the notice, valid forms of payment in Vietnam are only checks, payment orders, payment orders, collection orders, and other payment instruments as prescribed by the State Bank.

Illegal means of issuance, supply and use of illegal means including bitcoin and other similar virtual currency will be fined from 150 million to 200 million VND.

According to the announcement, from January 1, 1818, the issuance, supply, use of illegal means of payment such as bitcoin will be prosecuted for criminal liability.

The State Bank's announcement does not explain the reason why the ban on using bitcoin and similar virtual currency. 

[Freshmen]

www.abc.net.au/news/2017-10-23/bitcoin-one-step-closer-to-being-regulated-in-australia/9058582

The wheels sure do move slowly over here but they do move.


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.

Key points:

New laws part of Government's efforts to combat money laundering and terrorism financing
AUSTRAC would be given new powers to monitor digital currency exchanges
These exchanges would be required to identify customers more stringently and report suspicious transactions
The value of the controversial cryptocurrency's hit its all-time high on October 21, with each Bitcoin trading at $7,467 (or $US6,149).

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.

Bitcoin explained


Can't tell a bitcoin from a blockchain? Read our explainer to see how the cryptocurrency works.
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".

"This regulatory gap is also having an impact on the legitimacy and public perception of the digital currency sector, which may impede developments or the use of these currencies in the future," the AGD said.
A mixed industry response

There is a "legacy stigma" with digital currencies, and that people unfortunately associate Bitcoin with crime, Independent Reserve's director Lasanka Perera said.

"These new laws would be good for the industry, it will give more confidence to investors, consumers and businesses to enter the industry," he said.

But some digital currency businesses believe that the anti-money laundering bill imposes unduly harsh obligations.

"The proposed legislation will have the effect of requiring KYC [Know Your Customer] procedures of our customers for even very small transactions," said Daniel Alexiuc, who runs an online business called Living Room of Satoshi.

He said this includes small transactions like "paying your phone bill or buying a banh mi (Vietnamese bread roll) for lunch".

Through Mr Alexiuc's website, customers can use Bitcoin and 10 other cryptocurrencies to pay their household bills — as long as they have BPAY facilities like ANZ Bank, Optus and Australia Post.

Mr Alexiuc made submissions to the Senate's legal affairs committee arguing that there should be an exemption for payments under $1,000.

His concern is, under the proposed laws, he would be required to ask his customers to provide photo identification before they register for an account.

"It will kill our retail payment system, and these new laws are completely unfeasible," he said.
The law currently does not require digital currency exchanges to conduct an identification check on customers who open accounts

However, some of the operators who spoke with the ABC said they, nevertheless, ask for "100 points of ID" from their customers because it is "best practice".

The imposition of new regulations on digital currency exchanges may also impose high entry barriers to new entrants.

"There is likely to be an ongoing expensive compliance cost, particularly in regards to ongoing transaction monitoring," said BTC Markets' director Jarrod Crane, who is supportive of the proposed laws.

However, he conceded that: "If this regulation was around in 2013, we probably wouldn't have been able to start our business."

Topics: business-economics-and-finance, regulation, currency, australia

First posted 23 Oct 2017, 3:11am

Well I think develop countries always going something great for his people and that what bitcoin is going to do now bitcoin is going to extra development in in develop countries and there is no doubt that in Australia bitcoin will go more high and stronger than any other country so I hope every country will regulate bitcoin.

[Osarman]

Well, In my country, Vietnam, The State Bank issued a notice banning the use of bitcoins and similar virtual currency in Vietnam.

According to the notice, valid forms of payment in Vietnam are only checks, payment orders, payment orders, collection orders, and other payment instruments as prescribed by the State Bank.

Illegal means of issuance, supply and use of illegal means including bitcoin and other similar virtual currency will be fined from 150 million to 200 million VND.

According to the announcement, from January 1, 1818, the issuance, supply, use of illegal means of payment such as bitcoin will be prosecuted for criminal liability.

The State Bank's announcement does not explain the reason why the ban on using bitcoin and similar virtual currency. 

There is no need to get worried about the situation. Your country has banned the usage of bitcoins but trust me it is going to be a temporary ban .There could be many reasons behind this step and obviously the government is not answerable to you for implementing such a crucial law.

The possible reason behind it would be the decline in usage of your own national currency and some cases of corruption and misuse of virtual currencies.

[Nilda]

Someone has to take the lead and Australia took the challenge. I thought countries with the highest concentration of criminal syndicates would be the first. I guess the Aussies has the most forward thinking government.

[hispout]

I feel yes and no, its a good thing.

Main message i wanted to put across is even Australia are looking at it with maturity and not a craze brought onto us by our US cousins.

As the kids these days, the government sees that Bitcoin is a "thing" that cannot be ignored and requires attention as it seems to not be going away anytime soon.

The criminal element of the article is laughable, i concede and always have, as i have not come across a criminal who has refused money

For the cardigans this side of the world what the regulation means to them is, "well its regulated, lets get in on it, surely the government wont spend their time on nonsense so its worth a look in.."

People will make of it what they may. I hope it leads to a better adoption and a better bitcoin ecosytems the likes of what CoinJar and LivingRoomOfSatoshi have brought us over here.

The wheels sure do move slowly over here but they do move.

You seem to be suggesting that this is a positive move.  It might be good when governments are clear on their exact views on BTC, because it shows that their position is unlikely to get unreasonable or severe, but it's still a layer of inconvenience for people who want to get involved in BTC.

Regulation of exchanges can be quite annoying for users, especially when it requires serious invasion of privacy like questioning the usage of funds.

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 can also be used in legal and legitimate markets.  Crime is just a side effect of a good monetary system.

It will be the good fortune for bitcoin if Australia legalize it because Australia is a developed country which will boost the investment high as the people of Australia has the potential to invest and trade in it and likewise Japan they are also technologically very advanced country so I think they will compete the whole world.

[rayymat]

we are looking forward to the decision it will be great for cryptoworld