Obtaining crypto exchange license in Australia
- Obtaining a cryptocurrency exchange license in Australia
- Which bodies are involved in regulating crypto activities in Australia?
- The procedure for obtaining a license from AUSTRAC
More and more people are starting to open businesses related to cryptocurrency exchange. This activity is promising in many jurisdictions: Singapore, Estonia, Japan, Switzerland, USA, Australia and others. These states are set point about the status of virtual currency, they strictly regulate activities related to ICO projects and the opening of companies engaged in crypto-business. But each of the countries has its own features of registration of the license for commercial activities with virtual currency.
What bodies are involved in regulating crypto activities in Australia?
There are several regulators established in Australia that control financial activities. These include:
- Australian Transaction Reporting and Analysis Center (AUSTRAC)
- Australian Securities and Investments Commission (ASIC)
- Australian Government's Business Registration Service (BRS)
Each of them has its own functions and each of the bodies plays an extremely important role in the opening of a cryptocurrency exchange in Australia.
A cryptocurrency exchange is a trading platform that performs certain virtual currency transactions, such as exchanging cryptocurrency for fiat money or vice versa, including cryptocurrency for cryptocurrency. Such activities require licensing and AML/CTF verification in all developed jurisdictions.
First and foremost, such a trading platform must be registered with AUSTRAC. This is the Australian Transaction Reporting and Analysis Center, which is an Australian government agency created back in 1989 to prevent money laundering and terrorist financing. It also monitors cash transactions of banks in excess of $10,000.
How to get a license from AUSTRAC
Obtaining a license for an Australian cryptocurrency exchange is a complex and complicated process that requires expert support. There are several steps to be taken in order to obtain a cryptolicense:
Draw up an application (must contain a detailed description of the company's activities and your business plan, as the verification is very thorough) and apply for registration with AUSTRAC;
The next step is to go through the AML/CTF compliance check. That is, your business will be checked for the possible use of the platform for money laundering and transfer of funds to criminal terrorist groups. At this stage it is necessary to prepare AML Policy in accordance with the Australian legislation.
Obtaining a criminal record certificate of directors and founders of the Australian company or a certificate of the Australian National Police is also mandatory. Australian authorities are quite serious about starting a business by non-residents and strictly consider the issue of crypto exchange license by them. However, if you have good reputation, there will be no problems.
Please note that it is obligatory to have an AML officer and a Director of the company, who must be Australian resident and have relevant experience. If necessary our Law Firm A4 is ready to provide suitable candidates.
The application for registration is submitted to AUSTRAC on the approved form. You should be prepared to carefully check your compliance with AML/CTF regulations. After completing the application form, AUSTRAC may have questions regarding future business, so it is advisable to provide as much detail as possible on the application form. The authority will provide a final decision on registration within 3 months (which can be extended for a maximum of 30 days). AUSTRAC reserves the right to refuse registration without giving reasons. Attempt to submit another application is not prohibited.
A cryptocurrency exchange will be required to implement its anti-money laundering and anti-terrorist financing policy. Such a program usually consists of general provisions and regulations that define the customer recognition process. Also, if you make transfers/exchanges on your platform in excess of $10, 000, you will be required to report such transactions.
Once the company itself is registered, ASIC will include the platform in the register of companies and assign it a personal identification number (companies can also be registered with Australian Government's Business Registration Service (BRS) filling online application and electronic submission for further consideration.
In general, having an Australian company and getting registered with AUSTRAC is the best option to start a cryptocurrency exchange, because it allows you to open both a business account and a merchant account in Australia for cryptocurrency exchange activities.
As we can see, there are quite a few challenges that cryptocurrency exchange owners face in the process of organizing their activities. In order to make this process less complicated, our A4 Law Firm is ready to provide a full range of services for registering a cryptocurrency exchange in this jurisdiction.
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