Australia is set to formally regulate cryptocurrency exchanges, granting them legal recognition under new legislation. The Australian Transaction Reports and Analysis Centre (AUSTRAC) will oversee compliance, marking a pivotal shift in the country's approach to digital asset oversight.
Key Regulatory Requirements
- Mandatory Registration: All crypto exchanges operating in Australia must register with AUSTRAC.
- AML/CTF Protocols: Exchanges must implement anti-money laundering (AML) and counter-terrorism financing (CTF) measures.
- User Verification: Identity verification procedures for all customers.
- Record-Keeping: Maintenance of transaction records for 7 years.
The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2017 passed by the Australian Senate establishes this framework. According to FinTech Australia CEO Danielle Szetho, the legislation "provides legitimacy" for exchanges while enabling "the benefits of digital currency use and trading to flourish in a properly regulated environment."
👉 How Australia's new crypto regulations compare globally
Progressive Crypto Legislation Timeline
| Year | Milestone | Impact |
|---|---|---|
| 2014 | GST applied to crypto purchases | Created "double taxation" issue |
| 2017 Oct | GST reform passed | Eliminated crypto double taxation |
| 2017 Dec | AML/CTF Act amendment | Established exchange registration |
This represents Australia's second major pro-crypto legislative change in recent months. The October 2017 GST reform removed the controversial "double taxation" scheme where users paid taxes both when acquiring cryptocurrencies and when spending them.
Industry Implications
The regulatory clarity addresses longstanding concerns from tech advocates who argued that the 2014 GST classification stifled innovation. With clear guidelines now established:
- Exchanges gain operational certainty
- Institutional adoption barriers decrease
- Consumer protections strengthen
- Illegal activities become harder to conduct
👉 Best practices for compliant crypto exchanges
FAQs
Q: When do exchanges need to comply?
A: The Act takes effect immediately upon royal assent, with AUSTRAC expected to publish detailed guidelines within 90 days.
Q: How does this affect individual traders?
A: Most retail users will notice enhanced KYC procedures but gain improved fund security protections.
Q: Will this make Australia more crypto-friendly?
A: Yes - the dual tax elimination and clear regulatory framework position Australia as progressively pro-innovation while maintaining financial safeguards.
Q: What records must exchanges keep?
A: Transaction records, identity documents, and risk assessment reports for 7 years minimum.
The legislation balances innovation promotion with necessary oversight - a model other jurisdictions may soon emulate. Australia's phased approach demonstrates how to thoughtfully integrate cryptocurrencies into mainstream financial systems.