• Money (Australian or foreign currency) for digital currency
• Digital currency for money (Australian or foreign currency) as part of operating a digital currency exchange business.
Australian regulatory framework that applies to the startup:
When starting up the Australian Digital currency exchange, providers must be registered with AUSTRAC (Australian Transaction Reports and Analysis Centre and be entered on the Reporting Entities Roll: Pt 3A, AML/CTF Act; Ch 62, AML/ CTF Rules within 28 days of providing a designated service to their customers: s 51B.
● Reporting entities who are providing remittance services or digital currency exchange or remittance services services must also apply for registration on the Remittance Sector Register: Pt 6, AML/CTF Act; Ch 55, AML/ CTF Rules or the Digital Currency Exchange Service Register: Pt 6A, AML/CTF Act; Ch 76, AML/ CTF Rules.
● Providers must also give details about: their business structure, total number of employees, annual turnover and the designated services they provide: Ch 63, AML/CTF Rules.
Enrolling with AUSTRAC is part of the registration process because in 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced the implementation of more robust cryptocurrency exchange regulations. Those crypto regulations require exchanges operating in Australia to register with AUSTRAC, in compliance with the AML/CTF 2006 Part 6A – Digital Currency Exchange Register. The rule requires entities acting as exchanges, or providing registrable exchange type services, to identify and verify their users, maintain records, and comply with government AML/CTF reporting obligations.
Now, Crypto companies are held accountable to have robust AML processes in place and to verify the identity of any sender and beneficiary, to ensure no illegal activity, such as money laundering and terrorist financing, slips through the net. The CEO of AUSTRAC maintains the Digital Currency Exchange Register and unregistered exchanges are subject to criminal charges and financial penalties.
In May 2019, the Australian Securities and Investments Commission (ASIC) issued updated regulatory requirements for both initial coin offerings (ICOs) and cryptocurrency trading. Similarly, in August 2020, Australian regulators forced many exchanges to delist privacy coins, a specific type of anonymous cryptocurrency.
As Australia has established a pattern of proactive cryptocurrency regulation, and these latest regulations demonstrate the country’s continued effort to provide a clear operational framework for crypto businesses going forward. However, recent revelations that have exposed serious flaws in Australia’s financial industry will undoubtedly affect the way AUSTRAC approaches future compliance enforcement and will likely lead to increased scrutiny and a tightening of regulatory controls across the board.
Crypto companies should comply with regulatory expectations across various jurisdictions, safeguard their reputation with the public and banking partners, and quickly identify risks before they become threats.
The Australian digital Currency Exchange can comply with Australian Regulatory Framework by making threshold transaction reports (TTRs). If a reporting entity provides a designated service to someone which involves the transfer of physical currency of AUD10,000 or more (or foreign currency equivalent), the reporting entity must submit a TTR to AUSTRAC within 10 business days after the day the transaction occurred (Section 43, AML/CTF Act; Ch 19 and 37, AML/CTF Rules)
If a reporting entity sends or receives an instruction to or from a foreign country to transfer money or property - either electronically or under a designated remittance arrangement (DRA) - the reporting entity must report an IFTI-E (electronic) or IFTI-DRA to AUSTRAC within 10 business days after the day an instruction was sent or received (Sections 45 and 46, AML/CTF Act; Ch 16, 17, 51 and 72, AML/CTF Rules).
If a reporting entity forms a suspicion at any time while dealing with a customer (from enquiry to providing a designated service or later) on a matter that may be related to an offence, tax evasion or proceeds of crime, the reporting entity must submit an SMR to AUSTRAC.
Offences include money laundering, terrorism financing, operating under a false identity or any other offence under a Commonwealth, state or territory law. The reporting must made 24 hours after the time the relevant suspicion is formed if it relates to the financing of terrorism. While, it is three business days after the day the relevant suspicion was formed in all other cases (Section 41, AML/CTF Act; Ch 18, AML/CTF Rules).
Evaluate the current Australian regulatory framework for protecting the intellectual property rights of digital businesses.
Answer: Intellectual property (IP) and other intangible assets that relate to doing business include patents, trade marks, designs, and secret processes and formulae. Australian IP law is designed to encourage innovation and protect businesses that develop original IP in order to have a competitive advantage. Australia is also a signatory to a number of international agreements that protect IP in other countries. IP Australia is the Australian Government agency that administers IP rights and legislation.
Rights in relation to patents are derived under the Patents Act 1990 (Cth). An Australian patent provides a legal right to stop third parties from manufacturing, using and/or selling an invention in Australia. It may also be used to license someone else to manufacture an invention on agreed terms. Australian patents are administered by IP Australia.
The owner of a patent is called a "patentee". Patents granted under the Patents Act confer on the patentee a monopoly for inventions which are novel and not "obvious". A patent provides the patentee a monopoly right to prevent others from using, selling, making or otherwise exploiting an invention, for the duration of the patent.
There are certain criteria that an invention must meet in order to be patentable. These are set out in the Patents Act. In a nutshell, the invention must be novel, i.e. new, and inventive, and must relate to a field of commercial endeavour (rather than artistic endeavour).Patentable inventions typically include devices and industrial or technical methods or processes. However not all inventive concepts lead to patentable inventions. An example is the mere discovery of natural phenomena, or the mere presentation of information.
In order to meet the requirement of being "new" or "novel", the invention must not have been published anywhere in the world or used anywhere in the world by any person, before the "priority date" of the patent application. Accordingly, the confidentiality of all information relating to an invention is of importance to a successful patent application.
In Australia there are two types of patent protection:
1. a standard patent - allows a maximum 20 year term
2. an innovation patent - allows a maximum eight years term.
Australia has a well-developed legal system that protects the intellectual property of businesses and individuals. Businesses can register a trade mark as a marketing tool. The law in relation to the registration of trade marks and infringement of registered trade marks is governed by the Trade Marks Act 1995 (Cth). A registered trade mark provides the legal right to use, license or sell the mark within Australia for the goods and services for which it is registered.
When the trade-mark is registered, we do not have to prove that we have gained a reputation in any market to bring an infringement action under the Trade Marks Act for another person's breach of your registered mark. Upon registration, you obtain the right to:
• exclusively use or authorise another person to use the mark throughout Australia in relation to goods or services specified in the registration;
• sell the trade mark as personal property;
• and, notify the Australian Customs Service of objection to the importation of goods that infringe your rights in the marks.
A domain name is a unique internet site address that allows others to access your website. Internet addresses ending in ‘.au’ are registered in Australia and are administered and regulated by the .au Domain Administration (auDA). To register for an .au domain, the domain name must be available and the business must meet auDA’s policy on domain name eligibility and allocation
"Confidentiality" and "trade secrets" are both types of intellectual property and strategies for protecting intellectual property. Confidential information may be anything from a concept or business idea to a formula or plan to make something. As this type of confidential information may be difficult to protect under laws relating to other forms of intellectual property such as trade marks or copyright, a Confidentiality Deed may be an appropriate form of protection for the confidential information.
For information to be protected under a Confidentiality Deed, information must have the necessary quality of confidence, that is, it cannot be information that is known to the public already. Information need not be novel, inventive or original, but must be some product of the mind that confers a confidential nature upon that information. To be protected, information must be provided in circumstances of confidentiality.
A Confidentiality Deed is an agreement between parties to keep specified information confidential. Parties may be companies or individuals or a combination of both. One party may disclose confidential information to another, or both parties may exchange information. Common situations in which Confidentiality Deeds are used are:
• negotiations for the sale of business, where a seller of the business may allow a potential purchaser to inspect accounts and other financial information relating to the business, for the purposes of deciding whether to purchase the business;
• joint venture or partnership, where parties considering an alliance to benefit both of them may each reveal business information or secrets to the other for the purpose of deciding whether to enter into a business relationship together, or having done so, to share information for the benefit of each;
• a new business idea or concept, where a person with a business idea or concept approaches another as a potential partner, or for finance, for technical support or otherwise;
• as part of an employment contract to prevent an employee from making unauthorised use of the employer's information during the period of employment and after employment ceases.
