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Cryptocurrency Exchanges are Being Registered in Australia

Regulation for crypto trading in Australia is moving forward thanks to AUSTRAC (Australian Transaction Reports and Analysis Centre), a financial intelligence agency which wants to curb money laundering and terrorist financing.

More than 200 exchanges registered

Until February 1st, 2019, around 240 cryptocurrency exchanges had gone through the registration process, which involved performing background checks and anti-money laundering procedures. More than a year ago, Australia decided to amend legislation and make a requirement for crypto exchanges to register with AUSTRAC.

The financial intelligence agency started to take actions following the amendments to anti-money laundering and counter-terrorism laws, investigating 11 crypto trading platforms and declining two registration requests until now.

Since 2017 cryptocurrencies had started to gain popularity after their valuation raised by triple-digit folds in less than a few months. People had been attracted by the huge amount of volatility, but the lack of regulation in the industry, combined with no standards for blockchain-based companies led to some important thefts and exchange hacks. That forced regulators at a global scale to start and develop a regulatory framework for cryptocurrencies.

Procedures seem to take longer than anticipated, Australia is among a few countries which had designed a registration process for crypto trading platforms.

Scams reports

Some voices claim that the decision taken by AUSTRAC might have been motivated by more than 6,000 reports of potential scam companies linked to the cryptocurrency industry. Losses were estimated to be around $9.5 million and some Initial Coin Offerings (funding procedures which help blockchain-based startups to raise capital for their activities) turned out to be just some elaborate Ponzi schemes.

Although registration procedures might have made it harder for exchanges to conduct their activities, experts from the industry are now acknowledging the necessity of rules for exchange platforms. It is also the case for Adrian Przelozny, head of Independent Reserve cryptocurrency trading, who had been speaking with ABC recently.

We always had the feeling that regulation is important to bring cryptocurrency into the mainstream. If you look back two or three years, it was quite easy for anyone to start their own exchange. It was really up to the consumer to do their own research to see if the exchange they were interacting with was one they could trust.”

It's good to see exchanges recognizing how important it has rules in play and hopefully, other countries will follow on the same path as Australia, as soon as possible.

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