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Australia Moves to Regulate Bitcoin

Last Updated March 4, 2021 4:50 PM
Rebecca Campbell
Last Updated March 4, 2021 4:50 PM

Digital currencies such as bitcoin are attractive for terrorism financing, according to Australia’s financial intelligence agency, AUSTRAC, which is calling for them to regulate it under its anti-money laundering and counter-terrorism financing laws.

A report published by AUSTRAC, Terrorism financing in Australia 2014, stated that terrorism financing was turning its attention to electronic and online payment methods, which is likely to rise over time.

The report said:

Terrorist groups engaged in radicalisation, recruitment and communication online (such as through social media) are a particularly high risk of using online payments systems and digital currencies.

According to the Sydney Morning Herald , this week AUSTRAC is co-hosting a counter-terrorism financing summit with Indonesia in Bali. At the summit, Justice Minister Michael Keenan is planning on informing those in attendance of the work Australia is committed to doing when it comes to improving its anti-money laundering and counter-terrorism financing laws as it works toward regulating digital currencies.

Misuse of Bitcoin

It hasn’t been smooth sailing for bitcoin since its arrival.

In 2014, the defunct Toyko-based Mt. Gox halted trading after 850,000 bitcoins went missing, and the closing down of Silk Road, in 2013, an online black market, which allowed users to sell illegal items anonymously with digital currency such as bitcoin.

Additionally, after the recent Bitfinex hack, which saw the price of bitcoin drop by 20 percent last week, the security of bitcoin has been called into question.

As a consequence of bitcoin’s tarnished past, the Anti-Money Laundering and Counter Terrorism Financing Act has recommended that the inclusion of digital currency should be regulated.

It states that:

While digital currencies have undoubted legitimate uses, the transfer of convertible digital currencies can occur without passing through the formal financial sector. This provides another tool for criminals and terrorist financiers to move and store illicit funds beyond the reach of law enforcement and other authorities and purchase illicit goods and services.

Despite the fact that the price of bitcoin has made a significant improvement since Bitfinex’s hack, rising close to the $600 mark this weekend, the future of bitcoin remains unsure as it slowly recovers.

Featured image from Shutterstock.