Post-transitional Period for Digital Currency Exchange Provider, What’s Next?

Since 3 April 2018, a digital currency exchange (DCE) provider has been required to comply with the obligations imposed by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) under the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2017 (Cth) and the transitional arrangements were required to be applied by all the existing and new DCE providers from 3 April to 2 October 2018. During the transitional period, the AUSTRAC CEO can take enforcement action against a DCE provider if the CEO is satisfied that the provider failed to take reasonable steps to comply with the relevant provision under the AML/CTF Act.

On 5 October 2018, AUSTRAC has issued reminders to all registered and enrolled DCE providers by email that the 6 months transitional period for all DCE providers to adjust to the AML/CTF Act by implementing AML/CTF program, procedures and processes has ended on 2 October 2018.

Full Compliance Required

DCE providers now need to ensure that they have fully implemented their own AML/CTF compliance program, procedures and processes in order to meet the obligations imposed by the AML/CTF Act including but not limited to the following:

1. to periodically review and to update the ML/TF risk assessment of the business;
2. to appoint the AML/CTF compliance officer;
3. to maintain regular independent review of the AML/CTF Program;
4. to implement an employee due diligence program in place;
5. to convene an AML/CTF risk awareness training program for employees;
6. to apply policies and procedures for corresponding with AUSTRAC;
7. to apply the KYC procedure including ongoing customer due diligence procedures and enhanced customer due diligence program.

From 3 October 2018 onwards, AUSTRAC with apply a proactive approach to engage with DCE providers to check whether they have fully implemented all required programme/measures/procedures to comply with the AML/CTF Act including KYC obligations, as well as the industry itself, on a case by case basis.

Need help?

If you are one of the DCE providers and it is important for you to be aware of, and compliance with the obligations imposed on you by AUSTRAC. Should you require any assistance or further information in relation to your obligations, please contact our compliance team.