Virtual Asset Service Providers

Businesses which provide virtual asset services in Australia are required to be registered with AUSTRAC. We have summarised some of the requirements for running your virtual asset services business below including:
What is a Virtual Asset Service Provider?
Do I need to enrol and/or register my business with AUSTRAC?
How do I enrol and/or register my business with AUSTRAC?
Ongoing compliance obligations

What is a Virtual Asset Service Provider?

A virtual asset service provider is an individual or business that provides one or more of the following services:

Exchange virtual assets for money
Exchange money for virtual assets
Exchange virtual assets for virtual assets
Safekeep virtual assets or private keys to virtual asset wallets
Transfer virtual assets on behalf of a person, from one wallet to another

Do I have to be enrolled or registered with AUSTRAC?

A digital currency exchange provider is an individual or business that, as part of operating a digital currency exchange business, exchanges:

If your business:

  • provides any of the above virtual asset services; and
  • satisfies one of the criteria of the ‘geographical link’  requirements,

then you will be captured by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and have obligations under the Act.

The three ‘geographical link’ tests are as follows:

1. Permanent establishment located in Australia

The virtual asset service is provided to clients at or through a permanent establishment of your business in Australia.

2. Resident of Australia and provide services at or through permanent establishment in a foreign country

Your business is a resident of Australia and the virtual asset service is provided at or through a permanent establishment of the business in a foreign country.

3. Subsidiary of a company that is a resident of Australia and provide services at or through your permanent establishment in a foreign country

Your business is a subsidiary of a company that is a resident of Australia and the virtual asset service is provided at or through a permanent establishment of the subsidiary in a foreign country.

If your business is captured by the AML/CTF Act, you must enrol and register your business with AUSTRAC in order to legally provide digital currency exchange services to your clients. Upon successful enrolment and registration with AUSTRAC, you will be required to meet ongoing compliance obligations.

How to enrol and/or register your Virtual Asset Services business with AUSTRAC?

To apply for enrolment and/or registration with AUSTRAC you must complete the AUSTRAC Business Profile Form available on AUSTRAC’s website.

During the process of registration, you will be required to:

1.

Prepare and implement an AML/CTF Program, which complies with the AML/CTF Rules

2.

Identify the types of customers you will deal with

3.

Identify the jurisdictions you will deal with

4.

Identify and develop controls to mitigate and manage ML/TF/PF risk

5.

Outline your procedures for making reports to AUSTRAC in respect of transaction and suspicious matters

Sophie Grace can assist you with registering your Virtual Asset Service business with AUSTRAC and preparing a robust AML/CTF Program tailored to your business.

Ongoing Obligations

Once you have successfully obtained enrolment/registration with AUSTRAC you will be required to meet ongoing compliance obligations. These obligations include:

  • notifying AUSTRAC of any changes or updates to your AUSTRAC enrolment and/or registration;
  • renewing your registration every three (3) years;
  • adopting and maintaining an AML/CTF Program, which complies with the AML/CTF Rules, to identify, mitigate and manage ML/TF/PF Risk;
  • identifying and verifying the identities of your customers;
  • keeping records relating to customer identification, transactions and the AML/CTF program for a period of seven years; and
  • reporting various transactions to AUSTRAC, including Suspicious Matter Reports (“SMRs“), Threshold Transaction Reports (“TTRs“) and International Funds Transfer Reports (“IFTI“).

At Sophie Grace, we are here to assist you with all of your compliance needs. If you would like further information or assistance, please contact Sophie Grace directly.

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AML/CTF Reforms

Sophie Grace can provide you with an AML/CTF Program and can assist you to tailor it to your business’ needs. We have three different options available to suit your business and finance needs.

Template Documents

You can purchase template documents from our online shop. The template is an instant download and includes prompts to help you tailor the document yourself. We have template documents for:

  • Tranche 1 Reporting Entities;
  • Item 54 Providers; and
  • Tranche 2 Entities.
Compliance Portal

Sign up to the Compliance Portal and receive the template AML/CTF Program Package, and obtain access to updated documents in light of any updates we make as new guidance or amended legislation is released. Choose between:

  • document-only plans;
  • consultation-only plans;
  • video and regulatory update plans; or
  • a combination of all three.
Tailored Documents

Sophie Grace can assist you to prepare the AML/CTF Program package based on your business’ specific requirements. Contact us to discuss further. 

Find everything you need in relation to the AML/CTF Reforms

AML/CTF Reforms hub

Sophie Grace Compliance Portal

Sign up today for up-to-date compliance policies and regular consultation with our staff. Watch our demonstration video now!

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