Australian cryptocurrency exchanges are now operating under the authority of  anti money-laundering regulator AUSTRAC.

AUSTRAC is the financial intelligence watchdog that oversees compliance with anti-money laundering and counter-terrorism laws in Australia.

The agency is best known in recent times for its legal action against the Commonwealth Bank over allegations regarding the bank’s alleged failure to disclose suspicious transactions.

Effective from yesterday, digital currency exchanges must meet various obligations to ensure compliance with the Anti‑Money Laundering and Counter‑Terrorism Financing Amendment Act 2017.

Among the measures, crypto exchanges need to report all transactions involving more than $10,000 of fiat currency, as well as any suspicious matters.

They will also need to maintain a program to identify and manage associated risks. That includes protocols for verifying the identities of customers, and keeping some records on file for seven years.

The measures were introduced after an 18-month consultation period with the Australian Digital Commerce Association (ADCA).

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“The ADCA worked very closely with AUSTRAC to bring clarity and oversight to an industry that needed formal regulation in order to allow industry players to adhere to standards,” said ADCA chairperson Loretta Joseph.

“Australia, as a mature market with one regulator, and a government with an innovation agenda, can be a clear leader in the responsible adoption of blockchain technology.”

The website itnews.com.au reports that two domestic crypto echanges — Independent Reserve and Coinspot — confirmed they had met their compliance obligations with AUSTRAC.

Over the next six months until October 3, 2018, a transitional “policy principles” period will be in place. During that time, AUSTRAC can only take enforcement action if an exchange fails to take reasonable steps to meet compliance requirements.

“Transitional registration arrangements will be in place for existing businesses to allow them to continue providing services while their registration application is being considered, the AUSTRAC statement said.

All Australian-based DCEs will need to register for approval with AUSTRAC by May 14, 2018.

The latest developments with AUSTRAC follow an announcement by the Australian Tax Office in January that it was putting together a taskforce to investigate tax-avoidance in cryptocurrency transactions.

The ATO now treats cryptocurrencies as assets for the purpose of calculating capital gains tax.

 

This article first appeared on Business Insider Australia, Australia’s most popular business news website. Read the original article. Follow Business Insider on Facebook or Twitter.