Australian minister to share updates on regulating digital currency at 2016 CTF Summit

According to recent reports, Australia is moving to regulate digital currencies such as bitcoin under its anti-money laundering and counter terrorism financing (AML/CTF) laws.

Australian Transaction Reports and Analysis Centre (AUSTRAC) is co-hosting the 2016 Counter-Terrorism Financing Summit with Indonesia in Bali this week, The Sydney Morning Herald reported. The Australian financial intelligence agency believes that the anonymous nature of digital currency transactions make them attractive for terrorism financing.

During the summit, Justice Minister Michael Keenan will provide details on the progress made so far to improve the country’s AML/CTF regulations after a review recommended the regulation of digital currencies.

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

In April, Keenan tabled the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act in Parliament, which recommended amendment of the act to regulate digital currency-related activities. It also recommended broadening the definition of e-currency to include digital currencies such as bitcoin.

"While digital currencies have undoubted legitimate uses, the transfer of convertible digital currencies can occur without passing through the formal financial sector," it said. "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 May, the Australian government’s response to the Senate Economics References Committee’s report on digital currency was published, which outlined the government’s intention to engage the FinTech Advisory Group in the development and implementation of its responses. Among other things, the committee had recommended that digital currencies should be treated as money, further examination of appropriate tax treatment of digital currencies, establishment of digital currency task force and bringing digital currency exchanges under AML/CTF regulations. In its response, the government had agreed to most of these recommendations.