Straya to regulate bitcoin but property laundering is awesome

Via Kitco:

Australia is very close to introducing regulations for the cryptocurrency market, with the country’s Parliament scheduled to vote on a new anti-money laundering bill this week.

The news comes as bitcoin hit a new all-time high over the weekend, breaching the $6,100 level on Saturday. The cryptocurrency’s surge is unprecedented, as just a year ago it was trading at $630.

But, many analysts believe that bitcoin is doomed to fail, largely due to threats posed by possible government regulations.

In a recent report, Goldman Sachs said that bitcoin is not to be trusted because its future is unknown due to “significant regulatory risks.”

For example, China introduced a ban on initial coin offerings (ICOs) and shut down some cryptocurrency exchanges last month. And in October, Russian President Vladimir Putin also spoke in support of regulating cryptocurrencies.

Now Australia is looking close to introducing its own new laws, which, if passed, will grant additional authority to the national financial intelligence regulator AUSTRAC to oversee digital currency exchanges.

According to the proposed bill, it will be illegal for any “unregistered person” to offer digital currency exchange-related services.

“Businesses that trade digital currencies for money, and vice versa, will be required to enroll and register with AUSTRAC,” Justice Minister Michael Keenan said in August when describing the new laws.

All registered persons will also be required to “report threshold transactions and suspicious matters to AUSTRAC, and keep appropriate records.”

Australia has expressed concern over digital currencies in the past.

“Virtual currencies, such as Bitcoin, are increasingly being used by serious and organized crime groups,” the Australian Criminal Intelligence Commission (ACIC) said in a report released in August.

Such regulation is welcome before the ICO market her goes gaga.

But what about the other money-laundering ponzi scheme? John Cassara, a former US Treasury official and undercover intelligence agent, is the latest to shame Australia for failing to enact global anti-money laundering (AML) rules for real estate gatekeepers. From The ABC:

Allegations that the Commonwealth Bank breached anti-money laundering laws on almost 54,000 occasions have raised concerns that Australia’s financial system is exposed to criminal elements, including the likes of drug runners…

John Cassara has come face-to-face with money launderers over a 26-year career, and he warned that both the US and Australia were losing the battle in enforcing money laundering laws.

Mr Cassara said the recent case of the Commonwealth Bank just proved how exposed Australia was to sophisticated money laundering gangs…

A perceived loophole in Australian law means lawyers, accountants and real estate agents do not have to declare anything over $10,000.
Australia’s anti-money laundering law in fact does not cover those industries, despite promises when the law was enacted in 2006 the legislation would be widened.

Mr Cassara said it was essential for such designated professionals to be made to adhere to anti-money laundering guidelines.

“Unfortunately this is taking a lot of time, there’s a lot of pushback from the industry, there’s a lot of lobbying going on,” he said.

“Eventually it will happen, but I just hope it’s sooner rather than later.”

In March this year, Transparency International ranked Australia as having the weakest AML laws in the Anglosphere, failing all 10 priority areas. By comparison, the US failed nine out of 10 priority areas, ranking second worst in the Anglosphere.

However, unlike Australia, the US is at least taking action to tighten their AML laws, according to CNBC:

The Treasury Department said that 30 percent of high-end real estate deals that were subject under a new watchdog program involved people who had been targeted by the government for “suspicious activity” and potential money laundering.

Treasury this week expanded and extended a program targeting luxury real estate deals in New York, Miami, Los Angeles and other big markets to prevent the use of real estate for money-laundering by overseas buyers. The program was designed to prevent buyers from using shell company’s or LLC’s to hide the identities of the real buyers.

…the program was extended in February and is now being expanded to close loopholes. It also added the city and county of Honolulu.

Real estate experts say the expanded program could put pressure on high-end real estate markets…

The most important part of this week’s rule was closing a massive loophole involving wire transfers. Brokers say that ever since the rules were first imposed in 2016, buyers could easily avoid them by using wire transfers. Now, wire transfers will also be subject to the rule — closing the loophole.

Now compare this reform program to Australia, where money launderers continue to roam free.

In 2015, the global regulator of money laundering – the Paris-based Financial Action Taskforce (FATF) – released its mutual evaluation report, which found Australian homes are a haven for laundered funds, particularly from China. In June this year, FATF also placed Australia on a watch list for failing to comply with money laundering and terrorism financing reforms.

Legislation to implement the second tranche of AML legislation covering real estate gate keepers has been gathering dust in Canberra for a decade.

Accordingly, realtors, lawyers, accountants and other real estate gate keepers are currently exempted from AML requirements. And this exemption has provided an easy avenue for foreign buyers to launder funds through Australian property.

Sure, the Australian Government is currently undertaking yet another consultation on implementing the second tranche of AML legislation, and has promised to finalise the new rules by the end of this year. However, the Government set similar deadlines 2008, 2010, 2012 and 2014, all of which failed to deliver legislation.

Moreover, The AFR reported in August that any reforms would likely exclude real estate agents, thus leaving the door ajar for laundering through property [my emphasis]:

George Brandis, federal attorney-general, is expected to make an “imminent” announcement about boosting powers and resources of Austrac, the government agency that combats money laundering, according to a department spokesman.

But it is expected to fall short of extending existing laws to cover real estate agents

Under existing law, real estate agents and other businesses involved in buying and selling real estate do not need to identify where the money comes from or who is paying.

The law does not require real estate agents, lawyers, accountants or any other person involved in the deal to identify the beneficial owner of the deal. A beneficial owner enjoys the benefits of ownership though title is in another name, such as a company…

Real estate agents report unprecedented numbers of overseas’ buyers of residential and commercial property in Melbourne and Sydney paying cash…

An estimated 70 per cent of Chinese buyers pay in cash, according to Transparency International, an international non-government organisation targeting corruption.

By failing to ratify the second tranche AML rules, as promised more than a decade ago, the Australia’s Government remains tacitly complicit with the dirty foreign money flooding into Australia’s homes and robbing young Australians of a housing future.


  1. And Goldman Sachs is an impartial steward of global finance and therefore its views are disinterested.
    Regulating crypto is inevitable; just as Uber and Air and all the others will too.

  2. Now if the right people in government were heavily invested in the Bitcoin inflating bubble pyramid, you could bet your bottom bitcoin that it would have been in the same boat as property… but since they’re not – heyyy!! Look at us! we’re doing something!

  3. The link to ‘criminal activity’ needs to be thoroughly debunked. It is pure BS as is all the terror threat BS. We are slowly becoming a police state like others. They are forever closing free-markets and ensuring govt. control in everything. The reason Bitcoin is taking off is that people are beginning to understand their whole financial universe is fake and manipulated.

    • Ronin8317MEMBER

      The link to criminal activity is very direct since many ransom-ware that encrypt the victim’s HDD ask for BitCoin as payment.

      • Agree Ronin….Cryptos are owned by the same nefarious actors that took to the internet before we upstanding citizens got on board and cleaned it up. Ownership is in itself irrefutable evidence of criminality. We can solve the drug, money laundering, computer hacking, terrorism and porn related criminal scourge with a single act of parliament. We must protect the kiddies and future generations from these new technological threats while we still can.

        Our government missed the opportunity with the interweb, we must act now on this new threat. Don’t get me started on robotics…

      • Yep. Criminals haven’t asked for payments in…..I don’t know,…….cash before………..

    • Now if I was to buy a few Kilos of cocaine from overseas it would be much easier (and safer) sending a few bitcoins across the world then carting physical money to the supplier. Mix that with the bitcoin laundry services that are readily available and you have yourself a viable and safe business. Even better if bitcoins are stored securely, if you ever get caught they cannot even be repossessed, ready for you to get out of jail.
      Can all this be done in the current financial market sure, but it takes a s#@$ ton more capital and bribery to get her started.
      If all these people supplying Islamic state cash were sending money though bitcoin they would most likely never have been picked up because they were just early investors in the crypto market.

      I think crypto is great, but it’s foolish to think a service promising anonymity is not going to be used for nefarious purposes.
      **Edit, i should have said mixers, not laundry.

      • The entire crypto market was less than $4bil 2years ago and $1billion 5 years ago when ISIS was in their prime. Not enough liquidity to fund a well armed war machine like ISIS on its very best day. It couldn’t even have paid for the fuel for the fleets of shiny new white Toyota HiAces they use to tool around in back then. Don’t let critical thinking get in the way of good click bait.

      • Huh? Isn’t thinking of possible scenario’s critical thinking, looking at the world with rose tinted glasses is not. And who said anything about using bitcoin to wholly fund a terror organisation, merely transferring value between nefarious actors. Buy cypto, transfer crypto, sell crypto. Just like a bank, insert money, send money, withdraw money. I only suggested if they had used a crypto analogue its more likely the bad actors would never have been caught.

  4. Can we really expect any property property regulation when every filthy thieving lying weasel corrupt politician in our govt has their dirty hands in property to make a buck at the expense of every citizen of this country.

    • Lol don’t be fooled.
      It’s cheaper to buy normal gaming cards.
      They perform the same, have MUCH longer warranty and have some resale value when you’re through.

      • Absolutely correctamondo, Myne, cryptos are yet another friggin’ nonsense ponzi games for idiots of this world. Remember the chain letters of the past? I’m sure they’ll be back too in the fulness of time, ah?

  5. Hypocrisy. Another funny thing, Chinese government is stepping in starting to regulate its citizens buying property HERE (one of the major reasons property is slowing imo). While our gov is like.. ‘everything is awesome’.

  6. reusachtigeMEMBER

    I don’t give a sh1t where someone gets their money from to buy any properties I might offload, I just want the profits just as any other good Aussie would! Only nerdy goodie-two-shoed c0cks worry about such things.

    • As a libertarian I agree, except I can’t afford a home so I want the Goverment to save us all.

  7. NZ acts on migrant intake & foreign property purchases. Big cuts in intake. Ban on foreign buyer purchase of existing dwellings. Cleaning up the mess.
    Will this be an additional flow now into Australia?

    On Tuesday, prime minister elect Jacinda Adern and NZ First leader Winston Peters – who will serve as deputy prime minister and foreign affairs minister in the new government – signed a commitment in Wellington.

    Major commitments include :
    * banning foreign buyers from purchasing existing New Zealand homes.
    * reducing immigration by up to 30,000 people a year
    * reviewing & reforming the Reserve Bank Act.
    * increasing the minimum wage to NZ$20 an hour by 2020.

    Speaking after the deal was signed, Arden said: “As a priority, we will restore funding to the health system, ensure all Kiwis can live in warm, dry homes, take action on child poverty and homelessness, crack down on foreign speculators.

    New Zealand First will have four cabinet positions in the new government and one under-secretary role, with portfolios to include defence, infrastructure, regional development, children, seniors and internal affairs.

    • portfolios to include defence, infrastructure, regional development, children, seniors and internal affairs.

      hang on what else is there?

      • immigration – that’s a big one.
        Who will be the Minister for immigration is to be decided in the next coupe of days.
        The migrant intake is set by the minister of immigration (cabinet decision only) and the foreign minister (peters) for refugees.
        I suspect the new NZ coalition will slash the migrant intake esp fake students etc & reduce from 70,000 to 40,000 but up the refugee intake slightly.
        The issue in nz is worth watching carefully as it impacts Australia.
        After being able to gain ridiculously easy entry in NZ (it’s the default if you can’t get into Australia or get kicked out of Australia) then residency they get a nz citizenship grant & can access Australia via the nz SCV with full work / property purchase rights.
        Currently we have 560,000 on NZ SCV with another
        240,000 mostly Asians & Indians in nz (pre earning limits or controls) ‘in transit’ – pending grants to then get a SCV to get into Australia.
        Clearly the Aust NZ SCV should be restricted tonNZ or Australian born only as per the original intent, not be used as a backdoor.
        Winston Peters has offered to formally apologise to Australia for NZ being used to sell residency & citizenship grants for third world migrant access into Australia.

        Peters recently.
        “”Our easy immigration policy allowed them to use us as a stepping stone to a country that without us they would never have got to – Australia.

        ”They came here, stayed a couple of years and moved on. Australia was always their goal. We were used.”

        That was why New Zealand should begin with an unreserved apology and a commitment to fix it”, Mr Peters said.