Regulatory Obligations for Zipmex in Australia
March 24, 2020
Bitcoin has started to gain media attention again due to a rise in the value of over 14% in response to the US Federal Reserve announcing they will continue to print an unlimited amount of money beyond the previously announced US$700 billion. With traditional stock markets plummeting due to COV-19 (Coronavirus) fears, there are now many people wanting to hop on the digital assets bandwagon. However, since the genesis of Bitcoin, getting your hands-on these digital assets from a trusted and well-established entity has been hard.
As this space is mostly unregulated, people find it hard to trust any digital assets exchange. That is why Zipmex entered the market intending to become a regulated digital assets exchange. People around the world often trust regulated entities over their unregulated counterparts because there is a lower risk of becoming a victim of fraud. This has undoubtedly been the case for Zipmex users, especially in Indonesia.
Zipmex gets licensed by Indonesia’s Commodity Futures Trading Regulatory Agency, also known as Bappebti.
Zipmex aims to become the market leader of digital assets exchanges in the Asia-Pacific region. Our goal has always been to avoid being an unregulated entity, as the only people, we would attract would-be digital assets enthusiasts. From our experience, it is tough to persuade a new person to start investing in digital assets on an unregulated exchange.
To gain the trust of people, Zipmex had to become regulated.
Most of the digital assets exchanges have already identified the untapped market of people who still haven’t invested in digital assets and have started to apply for a license to become a regulated entity. However, most of them usually fail regulatory procedures. Thus, they are yet to become regulated as well as offer insurance to their users.
This year alone, thirty other digital assets exchanges had applied along with Zipmex for the license. However, only a very small number of them passed the tests, and Zipmex was one of them.
As Indonesia has already taken steps towards regulating digital assets, numerous exchanges apply to obtain this license by Bappebti. By regulating the digital assets exchanges, Indonesia’s financial ministry aims to provide a safe environment for the investors to invest in digital assets such as Bitcoin.
The approval of a license for Zipmex has brought it a step closer towards achieving its goal of becoming the market leader in the Asia-Pacific region. For the new investors who have been on the lookout for regulated digital assets exchanges, Zipmex has just gotten a whole lot better.
Zipmex’s Regulatory Obligations in Australia.
In Australia, there is a very high demand for digital assets. While the digital assets veterans would generally go to their usual digital assets exchanges to buy some Bitcoin, the new investors are hesitant at putting their money in an unregulated exchange. To accommodate our growing number of customers, Zipmex is registered with AUSTRAC, an “Australian Government agency that uses financial intelligence and regulation to disrupt money laundering, terrorism financing and other serious crime”.
Meeting AUSTRAC’s regulation is not an easy task for everyone. Several exchanges have already applied and have either been refused, cancelled or suspended in the past. All these rejections add to AUSTRAC’s integrity.
In the remainder of this article, we will outline some of the critical AUSTRAC regulations which Zipmex strictly follows to ensure compliance at all levels of business.
Regulations set by AUSTRAC
To become registered AUSTRAC states: “You must develop, adopt and maintain an anti-money laundering and counter-terrorism financing (AML/CTF) program that reflects your business’ circumstances. Your AML/CTF program needs to set out the ways your business will comply with its AML/CTF obligations and identify, mitigate and manage money laundering and terrorism financing (ML/TF) risks”.
Money-laundering and terrorism financing risk assessment.
Zipmex is required to identify risk indicators such as employee collusion, darknet transactions, incomplete or suspicious customer data and unusual patterns of transactions. While these are a few risk indicators mentioned, there are many more the Zipmex team focus on to ensure systems and procedures mitigate ML/TF risks.
Anti-money Laundering and Counter-terrorism Financing Risk Awareness Training Program.
All Zipmex employees must undertake anti-money laundering and counter-terrorism financing training. The training consists of:
- Zipmex’s business obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and the consequences of non-compliance.
- The types of money-laundering and terror financing risk your business might face and the potential consequences.
- The processes and procedures in your AML/CTF program relevant to the work carried out by your employees.
Employee Due Diligence Program.
Zipmex is required to screen all employees to ensure they are not in a position to facilitate anti-money laundering and counter-terrorism financing. A series of background checks, criminal checks and passport verification is necessary to ensure all employees are above board. Other key personnel and the owners of the business must also undergo credit and bankruptcy checks to meet AUSTRAC’s regulatory obligations.
The Importance of Following Regulatory Obligations
Without going into further obligations, these few regulations provide an insight into what Zipmex must do to uphold AUSTRAC’s approval. While the list of compliance is extensive, Zipmex’s senior management, as well as all other employees, understand the importance of following regulatory measures to keep the community and Australia safe. Without these measures, Zipmex could expose the business to financial harm.
The timing of Zipmex being present in Australia could not have been any better as it would undoubtedly push the digital assets markets to reach new highs. Additionally, it also brings in new opportunities for the people who had not invested in the digital assets market due to the unavailability of a regulated exchange.
As Zipmex continues to train employees and conduct independent reviews, more and more investors will move to the platform. The team at Zipmex are ready for the wave of interest as we all approach the next Bitcoin halving event.