Australia to Tighten Controls over Cryptocurrency

News and Analysis

Australia is about to become one of the first countries to use anti-terrorism laws in relation to cryptocurrency.

The latter’s anonymity may make it attractive to terrorist organizations, representatives of Australia’s financial intelligence say. According to the Sydney Morning Herald, the summit organized by the service on the island of Bali, will feature Michael Keenan, minister for justice of Australia, who will speak of the measures the government has assumed to tackle terrorism funding and money laundering. His report will also include several recommendations as to cryptocurrency regulation.

“The report […] recommends strengthening an already robust legal framework to respond to new and emerging threats. 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,” Keenan said.

AUSTRAC has already stated in its earlier report that electronic and online payments are a risky method that may benefit terrorist organizations. They also noted that amounts of this financing increase as the methods become more popular.

Brad Brown of AUSTRAC has stated that there are some known examples of using Bitcoin for such purposes, citing the infamous instances of Silk Road and Mt.Gox.

These days, most countries lack any laws regulating turnover of cryptocurrencies. The only known decision of this sort was made in Canada in 2014, that acknowledged that cryptocurrencies were subject to AML and counter-terrorism regulations.

It’s not the first Australian attempt to regulate cryptocurrency. In 2014, local tax service classified Bitcoin as a tangible asset subject to taxation similar to VAT. This caused several local startups to leave for less oppressive jurisdictions.

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