Australia still working on a crypto travel legislation to track user funds

The agency will wait until more technology is developed to guarantee that sufficient technological capabilities exist before enforcing travel restrictions on cryptocurrency.

Daniel Mossop, assistant secretary of the Australian Department of Home Affairs, testified before the Senate Committee on Australia on 27 August 2021, Friday that “it depends on how it is done, so a technological solution that eliminates a lot of the legwork would be a game-changer.” Mossop continued, “We are not at a place where such a technology answer exists globally.”

It was dubbed the Crypto Travel Rule after the Travel Rule in the United States Banking Privacy Act. This is supposed to be an expansion of the Anti-Money Laundering (AML), Know Your Customer (KYC), and Know Your Transaction (KYT) regulations (KYT).

It has been more than two years since the FATF announced that cryptocurrency will be subject to its anti-money laundering regulations. The travel rule is critical for financial firms to comply with worldwide legislation. Travel rule recommendation 16 requires that all digital asset transfers include descriptive information such as the national identification number, the location, the customers, the ID number, the customer’s name, and the account number. It is a supplement to KYC and KYT that assists in determining the genuine identities of registered users and questionable transactions.

The crypto travel rule is to avoid the possibility of financial aid to terrorists. It will be a continuation of the way cryptocurrency industries have complied with anti-money laundering (AML) and counter-terrorism financing (CFT) policies in recent years. The implementation will prevent criminals from accessing funds via electronic means.

Nicole Rose, CEO of the Australian Transaction Reports and Analysis Centre (Austrac), stated that her organization is likely to regulate cryptocurrency exchanges in order to enforce anti-money laundering and counter-terrorism financing regulations.

Issues with technology obstruct crypto tracking

Commissioner Cathie Armour provided legal commentary on Australia’s approach to this matter. Should Australia classify cryptocurrencies as financial products or should they be classified separately from other digital assets? The Department of Home Affairs discusses additional elements that must be finalized before implementing the crypto travel rule. However, after all conditions have been met, the regulation may be adopted.

On 20 August 2021, Australia’s Victoria Police discovered about AUD 8.5 million ($6 million) in digital assets during a dark web drug bust. According to officials, this is Australia’s largest crypto seizure in history. On this basis alone, crypto travel rules must be implemented to prevent the spread of crypto-financial crime.

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