Crypto license in Australia

• Confidence in the business. Legally, the authorization from the regulatory authorities is a confirmation that the company has passed all the verification processes for compliance with standards. This stimulates interest from potential investors and customers. Cryptolicense from the Regulators of Australia is highly valued in the market.
• Transparency of financial transactions. Regulators require market participants to comply with AML/KYC rules. Such rules minimize the risks associated with fraud and money laundering.
• Asian market. Australia, due to its location, is connected economically with many participants of the Asian region and has a reputation as one of the serious trading players. Legal crypto business in this region will allow the opening of the market of Asia.

Access to technology and innovation. The government is interested in the introduction of blockchain technology in the banking system, supports crypto-business in every possible way, and optimizes Crypto exchange license Australia cost, there are many ATMs for crypto exchange in the territory, also encouraged by the government research DeFi.

Australian Transaction Reporting and Analysis Center (AUSTRAC) conducts registration and verification of a cryptocurrency company based on which it issues AFSL (Australian Financial Services License) for the provision of crypto services.

Mandatory requirements of this jurisdiction for obtaining an Australia crypto license:

• Registration of a legal entity with the state authorities
• Passing the inspection of the company’s officials
• Implementation of AML/CTF policies, rules, and measures, keeping records of KYC procedures (up to 7 years), and transactions (exchange/trade) over $10k are tracked.
• Capital requirements depend on the nature of the business
• Confirmation of safety standards. The company must demonstrate that it has taken all measures to protect customer assets from hacking and withdrawal of funds
• A detailed business plan describing the nature of the operations to be conducted (trading, exchange, storage), the risks involved, and the possibility of further business development
• Reporting, balance sheet, where payment of all taxes will be indicated

In Australia, a crypto license is only issued to a legal entity registered in the jurisdiction. As this indicates that the company will adhere to all anti-money laundering and financial fraud regulations.

The process of formalizing a crypto company consists of such steps:

1. Choosing the type of operations that the company will offer to customers
2. Decide on the organizational and legal form. The optimal solution will be the registration of a limited liability company (LLP), there is an opportunity to open a branch or representative office. For small businesses (turnover up to 2 million AUD), it is possible to open a private company.
3. Come up with a name for the crypto firm, and check the registry for a similar name.
4. Collect identification data on shareholders, managing managers, beneficiaries
5. Determine the legal address
6. Create a package of documents on the company
7. Registration with the Australian Government’s Business Registration Service (BRS).
8. Registration with the Australian Taxation Office (ATO) and Social Services.
9. Open an account in a local bank (the largest bank is National Australia Bank).
10. Pay all Australia crypto license fees, depending on several factors, including the type of business operations, and type of company (from $474).

For all those wishing to master the digital market in Australia, it is necessary to go through the process of obtaining an Australian crypto exchange license. Since according to the legislation operations with the purchase/sale, and use of smart contracts are equated to the provision of financial products, they are subject to licensing.

The process consists of several steps and requires submission to the Regulator of a package of documents consisting of:

• A business forecast, which clearly states what the company’s goals are and how it intends to cope with the risks and instability of the crypto sphere
• Rules of operations. It should describe how the company will fulfill KYC, report suspicious transactions, discrepancies in client documents, and risk assessment system to the regulator. Cryptocurrency exchanges are required to keep records of all transactions (amount, purpose, who the recipient is) for 7 years.
• Confirmation of qualifications and relevant experience of the founders (diplomas/certificates, CVs) of the managers, as well as confirmation of the absence of criminal records in the National Police of Australia.
• Confirmation of financial stability of the company (balance sheets/reports), and ability to cover potential risks.

Australia has two regulators of the financial services sector: the country’s Securities and Investments Committee (ASIC) and the National Transfer Reporting and Analysis Center (AUSTRAC).

Each has its functions to ensure market transparency and investor protection.

The Australian Securities and Investments Commission (ASIC), operates under the ASIC Act :

• regulates all financial services (crypto transactions are equated with financial services)
• audits balance sheets, company reports
• monitors financial transactions, investigates financial offenses, initiates legal proceedings on offenses, prosecutes, and fines individuals and legal entities.

The National Transfer Reporting and Analysis Center (AUSTRAC) began operations in 1989 and is responsible for:

• combating financial fraud;
• countering the financing of terrorism, etc
• registration of crypto exchanges/exchanges/platforms

AUSTRAC has registered top exchanges such as CoinSpot, BTC Markets, Independent Reserve, eToro, Kraken, and Bybit.

Cryptocurrencies also use smart contracts, which are equivalent to traditional contracts and are regulated by the Electronic Transactions Act 1999.

In this jurisdiction, crypto businesses are subject to the rules and requirements of:

• Corporations Act
• ASIC Act
• Consumer Protection Act
• AML/KYC Regulations
• Code of Conduct for Virtual Currencies

For a cryptocurrency company in Australia, there are standard tax rates as for financial companies, namely:

• corporate tax from 25% (annual turnover up to 75 thousand AUD), above – 30%;
• Capital Gains Tax (CGT) – depends on the amount of income (up to $18,200 – 0% rate, 45% if the income is above $180,001, progressive scale of calculations depending on the amount of income received).

Declaration must be filed by October 31 or a fine of 75 times the amount will be issued.

The regulator also equates tokens, NFTs, and stablecoins to cryptocurrencies.

There is a 50% discount on CGT for holders of virtual assets for more than a year.

Transactions related to:

• Receipt of salary in cryptocurrency
• Selling your NFT
• Payment for staking
• Receipt of funds/coins from a hard fork

But their further sale is taxable.

Mining is equated to entrepreneurial activity with payment of all relevant taxes.