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Registering a cryptocurrency exchange in Australia or obtaining an Australian cryptocurrency custodian license for cryptocurrencies that don’t qualify as financial products aren’t subject to ASIC’s regulatory oversight. However, trading in cryptocurrencies that qualify as financial products requires obtaining a license of an Australian cryptocurrency exchange operator & ASIC permits. 

Let’s take a closer look at other regulatory requirements for establishing cryptoasset exchanges in the Commonwealth of Australia.

Secondary Markets & Exchanges

Secondary markets & cryptoasset exchanges are governed by CTF/AML laws. Should cryptoassets represent financial products, exchanges or market operators are required to apply for an AFSL license.

How is the Holding of Cryptoassets Regulated?

Holding cryptocurrencies is subject to legal regulation if they represent financial products. In this case, their holders are required to apply for an AFSL license authorizing the ownership of cryptocurrencies.

Dealers/Brokers

Advisors, intermediaries or traders in cryptocurrencies qualifying as financial must apply for an AFSL license. Dealers or brokers trading in such kinds of cryptocurrencies should also ensure compliance with relevant regulatory requirements.

Dealers or brokers involved in exchanging fiat currencies for cryptocurrencies are required to get a cryptocurrency exchange operator license.

Decentralized Exchange

There’s no particular set of laws regulating decentralized exchanges; therefore, they can fall under the scope of either AML or CTF (depending on their characteristics). Establishing & managing decentralized exchange in Australia also requires applying to AUSTRAC for registration.

P2P Exchanges

There’s no particular set of laws prohibiting exchanging cryptocurrencies in a P2P network. However, all those engaging in P2P cryptocurrency exchange in the Commonwealth of Australia must obtain an AFSL license. Businesses facilitating in exchange of fiat currencies for cryptocurrencies are also required to register with relevant regulators.

Anonymity

Limitations on trading in cryptocurrencies involving anonymous participants are non-existent. Exchanging cryptocurrencies or providing related services requires compliance with AML/ CTF, which involves prohibition against furnishing services to anonymous parties.

Exchanges Abroad

DCEA is applicable to individuals planning on obtaining a cryptoasset exchange license or furnishing cryptocurrency exchange services in the Commonwealth of Australia. Australian nationals aren’t permitted to engage in any money-laundering activities; however, they can freely engage in an exchange of foreign currencies for cryptocurrencies that falls within legal boundaries.

Australia: Conducting ICO

Under the new guidelines issued by Australia’s Treasury, the current cryptocurrency landscape needs to be revised & new regulatory measures put in place in order to deal with ICO-related challenges.

If you are interested in launching a blockchain startup in Australia, you should keep in mind that conducting an ICO provides you with an innovative & fully legitimate way of doing so. 

Taxation

If you’re interested in obtaining a cryptocurrency service provider license in Australia, you should keep in mind that Australia’s IRS has three different definitions of cryptoasset taxation regime:

  • exchanging, purchasing/selling & mining cryptocurrencies are deemed trading in stocks;
  • using cryptocurrencies as payment methods is deemed trading in stocks;
  • using cryptocurrencies as remuneration is deemed an additional benefit.

Conclusion

In addition to cryptocurrency exchange, the new legislation also covers ICO in Australia. According to it, the structure of tokens determines the legal regime applicable to this or that cryptocurrency. 

If you have any further questions regarding regulation of cryptocurrency activities in Australia or obtaining a cryptocurrency license in Australia, do not hesitate to contact IQ Decision UK. Our legal assistants will be delighted to lend you a helping hand with any legal issues you’re facing in this regard.