Cryptocurrency license in Australia (2024)

The cryptocurrency market is characterized by active growth all over the world, so more and more entrepreneurs are interested in mastering it. Investors can choose from a variety of jurisdictions offering excellent conditions for starting a crypto business. Among the states with high chances for successful development of the blockchain sector is Australia. In this jurisdiction, every fifth person owns crypto (18% of the population in general). This type of currency can be legally sold, bought, stored and, in general, used in any day-to-day transactions. The security of cryptocurrency transactions is ensured by the government, which has taken a number of legal measures to regulate the blockchain sector in the country. One of these is obtaining a crypto license in Australia, a permissive document that gives absolute legality to any business activity involving crypto.

The Australian government appreciates the potential of cryptocurrencies, and therefore actively encourages innovation and promotes the growth of the blockchain industry as a whole. Entrepreneurs wishing to conduct cryptocurrency business in this jurisdiction have access to various advantages at their disposal. You can take full advantage of them only after successfully completing crypto licensing.

Although the local regulatory body does not create serious obstacles in this process, it is still important to follow exactly the requirements, conditions and norms of the current legislation. The easiest way to do this is to enlist the help of the attorneys and lawyers of Lawrange Law Office. We are ready to offer our many years of experience in licensing cryptocurrency companies abroad, in-depth knowledge of international law and a thorough understanding of the peculiarities of fintech regulation. We will help you register a crypto license in Australia with minimal time, financial and psycho-emotional costs.

Benefits of obtaining a crypto license in Australia

Successfully passing Australian crypto licensing allows companies operating in the virtual asset space to take advantage of some significant benefits.

Reliability and trust

By holding such an authorization document, the firm confirms the fact that it fully complies with the standards of regulatory authorities. This increases investor confidence in the business and attracts a wider client base. It also makes your business more sustainable in the long term.

Protection from legal problems

Licensed firms need to operate within Australian law, which reduces the risk of legal complications, fines or any enforcement action against your company. In addition, AML/KYC compliance helps protect consumers from fraudulent transactions, money laundering and terrorist sponsorship, which greatly enhances the status and prestige of the firm.

Development of international markets

A crypto license in Australia is considered a prestigious document, as this jurisdiction has a clean reputation. In addition, the practice of open economy has allowed Australia to become a serious global player in the international trade arena. The country has entered into numerous trade agreements with various nations, but most of all with the participants of the Asian region. Therefore, mastering crypto business in Australia allows foreign entrepreneurs to gain easier access to Asian markets.

The ubiquity of blockchain technology

The Australian government is actively involved in the introduction of cryptocurrencies into all spheres of life in the country (Australia is among the top 3 in the world in terms of these indicators). Thanks to active government support of this sphere, Defi technology research centers are being opened here (several high-profile projects have already been implemented). According to the latest data, Australia is at the forefront of projects related to DeFi. It is also allowed here to use crypto to pay taxes or, for example, to save for retirement.

Cryptocurrency regulation in Australia

A “Code of Conduct for Virtual Currencies” has been in force in this country since 2009. It defines a list of basic practices of behavior in the blockchain market, concerning, among other things, security of interaction with customers and personnel, anti-money laundering, etc.

At the state level, decentralized virtual currencies were recognized in 2017 through amendments to the regulatory framework for anti-money laundering and combating the financing of criminal organizations (AML/CFT). This regulatory document establishes requirements for persons conducting cryptocurrency activities in the country. Thus, according to the AML/CFT Law, companies are obliged to develop and implement policies, regulations, and procedures for customer identification, transaction monitoring, and suspicious transaction reporting. Entrepreneurs who are interested in a crypto license in Australia must have systems of control, risk management related to financial crimes.

Australian Regulators are also governed by other laws, including:

“On Corporations” – crypto assets are categorized as financial products when sold for investment or financial purposes.
“About ASIC” – amongst other things, sets out the functions and powers conferred on that regulatory body by corporate law (other than excluded provisions).
“Consumer Protection” – under this regulation, misleading consumers is prohibited, otherwise violators issuers, sponsors and other market participants will be prosecuted.

Australia does not currently have a specific regulatory framework for cryptocurrencies. Specific Australian legislation applies to crypto assets depending on their functional characteristics. For example, financial services companies involved in the cryptocurrency industry must obtain a financial license. If tokens, which are financial products, are traded on exchanges, a cryptocurrency exchange operator may need a broker license. Thus, it is important to properly identify the nature of the crypto being used so that the appropriate regulatory laws can be applied to it.

At the same time, it should be noted that in Australia the regulatory function in the cryptocurrency sector is performed by two bodies at once: the Australian Securities and Investments Committee (ASIC) and the National Transfers Reporting and Analysis Center (AUSTRAC). Each of these bodies performs its own exclusive functions aimed at stabilizing the cryptocurrency market and protecting its participants.

Australian Securities and Investments Commission (ASIC)

This government organization regulates all financial services in Australia, including cryptocurrency services. It is among the trusted Regulators of the world, so having a license from ASIC allows you to confirm the fact that the company can be trusted.

ASIC registers operators providing financial, cryptocurrency services and manages the publicly available registers of legal entities in the country. This Regulator can prohibit or initiate legal proceedings against firms that fall outside the scope of the ASIC Act. Also, this commission influences the amendment of legislation to make the financial markets more efficient and transparent. ASIC can investigate financial offenses. This body has the power to impose fines and prosecute individuals, legal entities found to be in breach of generally accepted rules and regulations.

A list of other important ASIC functions includes:

Tracking cryptocurrency, financial transactions.
Monitoring of news in controlled companies.
Control of capitalization indicators.
Study of balance of payments, etc.

National Transfer Reporting and Analysis Center (AUSTRAC)

This organization, acting as one of Australia’s financial intelligence units, has been active since 1989. It is responsible for combating:

money laundering;
financing of terrorism, etc.

The work of the regulatory body is governed by the Money Laundering and Terrorist Financing Act 2006 and the Financial Transaction Reports Act. 1988. The Australian government has granted AUSTRAC enforcement and investigative powers that apply to those engaging in suspicious activity. As of 2017, this regulatory body requires cryptocurrency companies to comply with its AML/CFT program implementation guidance, which focuses on the risks of criminal misuse associated with cryptocurrencies.

The process of obtaining a crypto license in Australia

Crypto companies are based on the use of blockchain technology and smart contracts. All services provided by them are defined by Australian law as a “financial product”, for this reason, a license to trade cryptocurrency in Australia is mandatory for anyone wishing to master the crypto market. The process of its registration is quite complicated and requires a professional approach. It consists of several consecutive steps.

Choice of activity

Before proceeding with licensing, an entrepreneur should decide exactly what type of services the company will provide. In Australia, a crypto firm may engage in:

Crypto exchanges, trading in crypto-assets – crypto exchanges, crypto-exchanges are designed to facilitate the process of buying/selling various tokens, including fiat funds. The license for cryptocurrency exchange in Australia confirms the safety and reliability of operations.
Storage of digital assets – storage services often involve giving customers access to cold (offline) wallets that provide a high level of security.
Initial token offering (ICO) – the main activity of the company is related to the issuance, sale of its own electronic coins within the framework of regulatory requirements and authorizations. Transparency of operations and investor protection is ensured by regulatory oversight bodies.

Company opening

To register a cryptocurrency company in Australia, you need to:

Choose a legal form of organization – this could be, for example, a private limited company (Pty Ltd), a public company, a limited liability partnership (LLP) or a branch/representative office.
Choose a name – your variant must be unique, i.e. not the same as previously registered ones.
Collect a package of necessary documents, including the Articles of Association and other constituent acts, information on shareholders and owners.
Apply for registration by contacting the Australian Government’s Business Registration Service (BRS) and completing ASIC Form 201.

Once the application is processed, the Registrar issues a certificate of incorporation and an Australian company number. To legally conduct business, you must also obtain an ABN number by registering with the Australian Taxation Office (ATO) and open a local bank account.

Preparation of documentation

Entrepreneurs who are interested in a license to trade cryptocurrency in Australia must provide the Regulator with a documentation package consisting of, among other things:

Business Plan – will allow the commission to understand the company’s goals, strategies and financial projections, as well as how well the licensee understands the risks of the cryptocurrency industry.
Transaction Rules – a special document that collects and describes all the nuances of transactions using cryptocurrencies. The rules should show how the company plans to identify its clients, report suspicious transactions, etc.
Evidence of financial stability – It is important for the regulator to be satisfied that the applicant has sufficient finances to ensure the efficient operation of its company and to cover potential risks.
Resumes of founders, beneficiaries, managers of the company – in addition to passport data for each of them, information should be provided on the availability of relevant experience, education, absence of criminal records, etc.

Submitting an application for licensing

With a complete package of documents, the entrepreneur submits an application to AUSTRAC. For this purpose, an application is prepared in a pre-approved form. Among other things, it should describe in detail the type of activity of your company. In case of full compliance with all requirements, a cryptocurrency license in Australia can be approved in 3 months.

AUSTRAC reserves the right not to give a reason in case of refusal to register. In this case, there will be no reconsideration of applications. Therefore, it is extremely important to entrust the licensing process to Lawrange professionals who are familiar with all the nuances and peculiarities of Australian cryptocurrency legislation.

Taxation of cryptocurrencies in Australia

There are no taxes on buying or holding cryptocurrencies in this jurisdiction. Buying or trading tokens as part of a business activity is taxable:

with income tax;
Capital Gains Tax (CGT).

When exchanged for goods, cash or other cryptocurrencies, there is a so-called “disposal” that is subject to local tax laws. In this case, any gain or loss must be reported on a tax return.

Capital Gains Tax (CGT) Rate:

For incomes between $0 and $18,200, it’s 0%.
From $18201 to $45,000 – 0% +19% of the amount exceeding $18,200.
From $45001 to $120,000 – $5092 +32% of the excess over $45,000.
$120,001-$180,000 – $29,467 + 37% of the excess of $120,000.
180,001 and $51,667 + 45% of the excess over $180,000.

Residents receive a 50% tax rebate when holding cryptocurrency for 12 months or more.

As for token mining, this type of activity is subject to the standard Australian Income Tax Act. However, the mining and subsequent sale of tokens also involves the application of CGT tax – it is paid on the difference between the price at the time of mining and the sale.

Why contact Lawrange

Our specialists will help you obtain a crypto license in Australia in exact accordance with the current legislation. We have been working in this market segment for a long time, so we are familiar with all the important nuances and peculiarities of the crypto-licensing process. Turning to us, our clients can count on:

Professionalism – extensive experience, in-depth knowledge of international law and cryptocurrency legislation in Australia opens access to guaranteed crypto license.
Promptness – highly qualified specialists and modern material and technical base, as well as understanding of all the subtleties of the licensing process allows you to solve the task in a short time, without the risk of rejection.
Honesty – we comprehensively and objectively assess the task at hand, recommend only those methods (services) that will show the best result, inform the client about every step taken, always stay in touch.

If you are interested in obtaining a license for cryptocurrencies in Australia, but you do not have enough free time, skills and knowledge, then use our consultation right now. Cooperation with us will save you from unnecessary time, financial costs and worries, and allow you to focus on your business.

Conclusions

A cryptocurrency license in Australia is an effective way to develop your own business, as it gives you access to the international blockchain technology market, including the high-tech Asian region. Legally operating crypto companies are highly trusted by partners, investors and customers.

Successfully obtaining a license to trade, exchange or store crypto depends on accurate compliance with local laws and the requirements of the Regulators – there are two of them in Australia: ASIC and AUSTRAC. Each of them performs certain functions and has the right to apply specific practices to cryptocurrency companies.

To make the licensing process as easy as possible, use the services of professionals from Lawrange AA. We are ready to accompany each stage of obtaining a crypto license, provide detailed advice on issues of interest, assist in preparing documentation and registration with various Australian authorities for the normal conduct of business.

FAQ

Do you need an ABN to trade cryptocurrency?

Any business must have an active ABN number to operate legally in Australia.

How do cryptocurrency law violations threaten operators?

Fines from 100 to 400 thousand US dollars are envisaged, as well as imprisonment from 2 to 7 years depending on the gravity of the violation. Moreover, such sanctions are envisaged not only for providers operating without licenses, but also for their clients.

What measures are in place to ensure the security and standards of cryptocurrency services in Australia?

Compliance with KYC policies is designed to prevent hacking, account theft and protect customer assets. This is accomplished through due diligence (CDD) and enhanced due diligence (EDD).

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