Australia to regulate bitcoin under counter-terrorism finance laws

Discussion in 'Bitcoin and Cryptocurrency' started by Winnie the Pooh, Aug 9, 2016.

  1. August 8 2016
    Australia to regulate bitcoin under counter-terrorism finance laws
    Jewel Topsfield

    Australia to regulate bitcoin under counter-terrorism finance laws

    Jakarta: Australia is moving to become one of the first countries to regulate e-currencies such as bitcoin under its anti-money laundering and counter-terrorism financing laws.

    Bitcoin - the most prominent digital currency to emerge globally - is backed by a computer code rather than a physical substance such as gold or mainstream currency.

    What is blockchain?

    As bitcoin moves into the mainstream, it might be time for you to brush up find out how the system works.

    The anonymity of payments using digital currencies make them attractive for terrorism financing, according to Australia's financial intelligence agency, AUSTRAC, which is co-hosting a counter-terrorism financing summit with Indonesia in Bali this week.

    Justice Minister Michael Keenan will inform the summit of the work Australia is doing to improve its anti-money laundering and counter-terrorism financing legislation after a review recommended the regulation of digital currencies.

    Many countries do not have proper regulatory frameworks for digital currencies. Photo: istock

    "The report … recommends strengthening an already robust legal framework to respond to new and emerging threats," Mr Keenan said.

    "The government is committed to facilitating growth and innovation in this sector and appropriate anti-money laundering and counter-terrorism financing regulation will aid that development."

    The AUSTRAC report, Terrorism Financing in Australia 2014, said electronic, online and new payment methods posed an emerging terrorism financing risk, which was likely to increase over the short term as use of these systems grew.

    "Terrorist groups engaged in radicalisation, recruitment and communication online (such as through social media) are a particularly high risk of using online payments systems and digital currencies," it said.

    A review recommends the definition of e-currency be broadened to include digital currencies such as bitcoin that are not backed by a physical asset. Photo: Chris Ratcliffe

    "Prepaid travel money cards (a type of stored value card) have also been used to transfer funds offshore for terrorism financing."

    AUSTRAC's acting national manager of strategic intelligence and policy, Brad Brown, said there were examples of the misuse of bitcoin globally.

    Justice Minister Michael Keenan will inform a summit on the work Australia is doing to improve its anti-money laundering and counter-terrorism financing laws. Photo: Justin McManus

    He pointed to Mt Gox, a defunct bitcoin exchange in Tokyo where bitcoins worth hundreds of millions of dollars went "missing", and Silk Road, a now closed online black market that sold illegal drugs.

    "I think it's important to regulate where there is a potential risk of abuse of money laundering and terrorism financing," Mr Brown said.

    The statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act, which Mr Keenan tabled in Parliament on April 29, recommends the act be amended to regulate activities relating to digital currency.

    It also recommends the definition of e-currency be broadened to include digital currencies such as bitcoin that are not backed by a physical asset.

    "While digital currencies have undoubted legitimate uses, the transfer of convertible digital currencies can occur without passing through the formal financial sector," it says.

    "This provides another tool for criminals and terrorist financers to move and store illicit funds beyond the reach of law enforcement and other authorities and purchase illicit goods and services."

    In 2014, Canada became the first country to regulate bitcoin and other virtual currencies under its anti-money laundering and counter-terrorism financing laws.

    Under the legislation, digital currencies are subject to the same record keeping, suspicious transaction reporting and verification as other money services businesses.

    However, many countries do not have proper regulatory frameworks for digital currencies.

    Last month a Florida judge dismissed a money-laundering case involving an alleged illegal sale of bitcoins on the grounds the digital currency was not real money under the laws of the state.

    In 2014 the Australian Tax Office designated bitcoin as an "intangible asset" rather than a currency, making it subject to GST. This led to several bitcoin start-ups leaving Australia.

    However, in March Treasurer Scott Morrison said digital currencies such as bitcoin would be exempt from GST.
     
  2. master.on

    master.on Member

    Will they need a judge warrant for that?
     
  3. Geterdun

    Geterdun Member AnabolicLab.com Supporter

    This will most definately be another tongue twister of words and legal ease to get by any legal constraints they might encounter. I'm sure many other places are watching this to see how it irons out. SMH
     
  4. MindlessWork

    MindlessWork Member AnabolicLab.com Supporter

    It could quite possibly need to be. Now every country out there wants to regulate bitcoin like common currency but it will surely be a difficult task. Bitcoin is intangible, and I am sure there well may be test cases but the Florida case mentioned above could well been the first test case involving bitcoin.

    For one thing the conversion of bitcoin to cash could well be done in a country that has very lax laws and what is to keep Australian citizens from holding bitcoin offshore under an anonymous name? Bitcoin is electronic not physical.
     
    Last edited: Aug 16, 2016
  5. Geterdun

    Geterdun Member AnabolicLab.com Supporter

    I'm not so sure they will. If Bitcoin is not regulated, or under the current Laws their trying to enact, how could they need one? Maybe I don't understand Bitcoin totally, but it's not even regulated correct? The article states a case dismissed in FL already due to Bitcoin not being real money under State Laws. There is the open door for the Feds to join in and do their part.
     
  6. MindlessWork

    MindlessWork Member AnabolicLab.com Supporter

    It is only a matter of time before the Feds weigh in on this issue and could side with Australia on this.
     
  7. Geterdun

    Geterdun Member AnabolicLab.com Supporter

    I am willing to bet the Feds WILL weigh in on this. The State has no power to enact anything not being regulated currency. Just my 1/2 cent
     
    MindlessWork likes this.
  8. MindlessWork

    MindlessWork Member AnabolicLab.com Supporter

    Yep, bet they were watching that Florida case to see how it went, and soon there could well be a plan for regulating the bitcoin market here in the USA along with working with other countries too.

    I think the regulations will come into play at the point bitcoin is converted to cash and vice versa.

    So soon bitcoin will be on the radar for even AAS purchases as well.
     
    Eman likes this.
  9. CdnGuy

    CdnGuy Member

    Make sense considering the Australian customs and govt's rules do Co inside with our govt strategies. Bc government recently had to install new regulations in the Casino business. Drug money was being laundered by the boat loads with no questions asked.

    edit- Op off topic I'm assuming you're Ozzy? Wtf your govt is really serious in regards to any type of substances huh...:confused:

    Australian smokers to pay more than $45 for a packet of cigarettes from 2020
     
    Last edited: Aug 16, 2016
  10. master.on

    master.on Member

    Mass surveillance in Australia - Wikipedia, the free encyclopedia

    The executive government has only superficial control over the Australian surveillance system. It is fully integrated with the NSA apparatus which immediately brings up an issue about sovereignty. This is not about a country's sovereignty over land, but of knowledge. The international exchange of security information is a challenge to human rights of Australian citizens, yet to be grappled with.

    Consequently, it is not in the interests of the Australian or US intelligence community for any public or even parliamentary discussion. The idea that the parliament and executive are in total control of government is a myth.
    The surveillance state: How Australia spies on its own

    Journalist who first reported on Edward Snowden revelations for the Guardian says Australia is ‘probably the country that has gotten away with things the most’
    Glenn Greenwald says Australia is 'one of most aggressive' in mass surveillance
     
    Last edited: Aug 17, 2016