Virtual currencies, especially Bitcoin, have enjoyed a transformation of image during the last year from having been regarded as extremely risky, volatile methods of payment for illicit goods to the focus of mainstream regulators and venture capital investors as the mainstream financial markets economy draws ever closer for peer to peer digital currencies.
Despite this sudden shift toward being regarded as the technological tour de force which could drive the financial markets economies of the world forward, Australia’s authorities remain highly conservative with regard to the uses of Bitcoin.
As last week drew to a close, the Australian Crime Commission (ACC) made its perspective clear with regard to the use of virtual currencies by launching Project Longstrike, a government initiative against organized crime involving the use of Bitcoin.
According to a report by Reuters on December 3, ACC Executive Director Judy Lind said that investigators were aware of and would be monitoring “misuse of virtual currencies to facilitate criminal activity.”
Australia is renowned internationally for being home to an extremely well organized economy and legistlative system, and indeed the country’s risk-averse approach to the use of Bitcoin reflects that line of thinking.
Although the ACC usually dedicates its resources toward tackling drug dealing, money laundering, terrorism and corruption, the criminal intelligence and investigative agency has committed resources toward ensuring that Bitcoin is not used to commit illegal activity on Australian soil.
Australia’s government has high regard for modern technologies that will serve to drive the financial markets economy forward, and the nation’s leaders have shown interest in assisting Australia’s efforts in becoming an innovator of Bitcoin technology, howevr the use of the virtual currency remains a concern.
Recently, the Australian Tax Office issued rulings which established and outlined the tax treatment for Bitcoin for commercial and retail purposes, which was met with some degree of discourse by Bitcoin proponents in Australia.
Australia’s Senate held a hearing with regard to the matter last week, however mainly positive aspects were presented by allcomers with regard to the potential of digital currency’s presence within Australia’s markets, hence the Senate asked all interested parties to submit recommendations with regard to how to handle illicit activity for consideration by the government.
Generally, ACC takes a dim view of any medium which could be party to anonymous transactions. In June 2013, the acting CEO of ACC Paul Jevtovic conducted a newspaper interview, stating that “The ACC is currently working with partners to explore the bitcoin market and other digital currencies, to better understand its size and criminal threat”.
Australia’s government has a love and hate relationship with dark markets, having recognized dark liquidity in FX trading as part of the financial landscape last year, subsequently issuing a set of rulings for dark pool operators to adhere to, yet the law enforcement agencies are very quick to respond to what they view as abusers of the dark market system.
Last week, Peter Nash was extradited to the US for his alleged involvement in the Silk Road anonymous marketplace, where he is being made the subject of investigation for Bitcoin-related fraud
In October this year, Queensland police seized the state’s first bitcoin ATM from a coffee shop as part of a drug bust, though it has never been ascertained whether the machine was in any way involved in illegal activity.
Indeed, whilst Australia remains a highly desirable jurisdiction in which to establish online trading business due to its fine business ethics, sensible regulatory system and proximity to the all-important Asia Pacific region, it is clear that the nation’s government still harbors many reservations with regard to virtual currencies whilst its Western counterparts in Switzerland, United States, Israel and the United Kingdom embrace the virtual currency with open arms,