Because cryptocurrency news is often in the financial press, you may question whether it’s worth your money to buy bitcoin in Australia or any other cryptocurrency. However, the most current Australian bitcoin law is independent of investing possibilities and should be considered. So, is it legal in Australia to use cryptocurrency? Despite the country’s progress in legalising cryptocurrencies, regulatory monitoring is now required.
What Is CryptoCurrency?
Cryptocurrency refers to any digital payment facilitated by blockchain technology in the context of digital payments. Similar to other nations, Australia utilises blockchain, a database system that holds data across several computers.
Almost everything on the internet can be purchased or sold using cryptocurrency. They may also be used to buy other cryptocurrencies and saved and preserved for future investment reasons as the value of their coins rises in value.
Is It Legal in Australia To Utilise Cryptocurrencies?
Australian fintech has exploded after the legalisation of cryptocurrencies in 2017. To prevent money laundering and terrorist financing upon their legalisation, the government ruled that these digital currencies were subject to the Anti-Money Laundering and Counter-Terrorism Financing Act of 2006. The strict laws that apply when purchasing bitcoin in Australia should be considered before making a decision.
To control the country’s cryptocurrency exchanges, Australia passed its first set of cryptocurrency rules. However, to do business in Australia, all cryptocurrency exchanges must register with AUSTRAC according to Part 6A of the AML/CTF 2006 guidelines enacted in 2006.
A company that acts as an exchange to purchase and sell digital money is bound by certain requirements if this regulation is applied. They have to carry out the following actions:
- Join the trading platforms.
- It is necessary to identify and verify users.
- Keep frequent records of your financial transactions.
- Obey any AML/CTF reporting guidelines. Maintain compliance
Exchanges that fail to comply may be subject to criminal or financial fines. By implementing rigorous verification measures, AUSTRAC seeks to prevent cryptocurrencies from money laundering or to fund illegal activities. However, keeping a watch out for possibly fraudulent trade activity is the provider’s obligation.
According to the Australian Securities and Investments Commission (ASIC), legislation governing initial coin offerings (ICOs) and trading was revised in May of this year. As a result, cryptocurrency types meant to be anonymous, such as “privacy coins,” are no longer allowed to be exchanged on publicly listed exchanges.
The Cryptocurrency Industry’s Commitment To Consumer Protection:
The Australian Financial Services (ASF) license is now necessary for bitcoin exchanges, a new regulation imposed in 2017. Due to Australian legislation, these digital currency service providers are regarded as other financial service providers regarding fees.
To avoid legal repercussions, anybody selling crypto-assets like tokens for investment or funding must categorise them as financial goods under the Corporations Act. As a result, customers are better protected since they know they buy licensed and regulated economic goods. In addition, consumers must be given prompt access to critical information, such as pricing schedules and standards.
Australian Bitcoin Laws And Regulations:
There is also the issue of Bitcoin not being regulated in Australia, which should be considered. According to the IRS, Bitcoin and other cryptocurrencies with similar features should be taxed as real estate. Therefore, if you buy bitcoin in Australia and sell them, you will have to pay Capital Gains Tax on the gain.
Due to the widespread usage of blockchain technology in Australia and elsewhere, cryptocurrency has the distinct benefit of being transported instantly across the globe. In addition, Australia’s laws allow cryptocurrency exchange service businesses to convert currencies. A variety of different currencies, including conventional money, maybe converted as well. Finally, it is against the law for cryptocurrency issuers to mislead or deceive their consumers. A supplier cannot claim that a token is regulated when it is not, for example.
A licensed exchange is your best bet if you’re trying to figure out how to purchase a cryptocurrency in Australia. As with any other financial product, interacting with licensed service providers gives you peace of mind that your purchase is secure. Also, when buying and selling property, be aware of your Capital Gains Tax requirements to prevent getting a nasty surprise from the ATO.
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