Australia Prepares for the First Stage of Government Bitcoin Regulation

According to the Financial Times, Australian authorities announced legislation that will massively alter the course of cryptocurrency in the country. The legislation places “digital currency” exchanges under the legal jurisdiction of Australia’s Transaction Reports and Analysis Centre (Austrac). Austrac is Australia’s financial crime branch of government, and as such, will be investigating crimes committed with cryptocurrency.

Unsurprisingly, the Australian Minister for Justice, Malcolm Keenan, pushed the movement. At some point during August 2016, Keenan announced an Austrac restructuring that freed up space for a “cybercrime” department. He said that the country needed a closer eye directed towards cryptocurrency crimes for the “unprecedented national security threats” they created.

In Keenan’s most recent statement regarding a cryptocurrency monitoring department in Austrac, he spoke between the lines. Except this time, the new legislation closely follows a massive money laundering scandal at one of Australia’s largest banks. It also rides the wake created by the takedown of the oldest Bitcoin exchange, BTC-E.

“We know that the national security threat to our nation and globally is unprecedented and modern technologies are presenting new and evolving threats – none more so than from malicious cyber activity,” he said in 2016. “We know that the use of fraudulent identities continues to be a key enabler of serious and organized crime and terrorism.”

According to Reuters, in 2017, Keenan said that “the threat of serious financial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously exploit them. These measures ensure there is nowhere for criminals to hide.”

In addition to a heightened regulation of digital currencies like Bitcoin and Ethereum, the new bill empowers law enforcement at Australia’s borders. The country’s law enforcement shines at those borders—at least when looking at darknet market drug importation or international smuggling crimes. (The Australian Border Force received a tactical boost earlier this year.) Now, law enforcement at Australia’s borders have increased search and seizure powers. Although, what those powers will translate to in real life is a different story altogether.

Although Australia was the first (reported) country to recognize Bitcoin as a “real world” currency, it missed the first place spot for “quickest to cryptocurrency regulation.” In early 2017, Japan introduced laws that required the regulation of any new “alternative coin.” Much of the changes in Japan were related to the hack of the former Bitcoin exchange ”Mt.gox.” While the monitoring of a wide spectrum of financial crimes was implied, an Austrac report from 2014 mentioned digital currencies in reference to terrorism financing and money laundering.

“A number of online payment systems and digital currencies are also anonymous by design, making them attractive for terrorist financing,” it read. This cryptocurrency regulation legislation is just the beginning of the terrorist money laundering bill.