Australia: ACMA against unlicensed websites using crypto
Regulation

Australia: ACMA against unlicensed websites using crypto

By Giorgi Mikhelidze - 13 Nov 2019

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The Australian Communications and Media Authority (ACMA) has focused on cyber security, declaring that unauthorised websites preying on the Australia’s population, often allowing crypto payments, need to be purged from the Aussie digital space.

Such a ruling was already made in the past when the Australian government suggested using facial recognition technology in order to identify underage Australians trying to access specific websites.

The websites in question are adult content and gambling. According to the ACMA, Australians are starting to become a lot more keen on accessing platforms without a formal license simply because they are willing to offer them services on cryptocurrencies.

It is likely that these websites understand the regulatory scrutiny, which is why they use cryptocurrencies as their main tool. Through such transactions, both the unauthorised websites and the Australian customers manage to stay away from the government’s radar.

Why Aussies choose these websites

Aside from the fact that Australians manage to hide from the government by using cryptocurrencies on these websites, there are also other reasons they access them. Naturally, there are different reasons depending on the type of websites, but there are some similarities regardless.

One example, concerning the gambling industry, is that Australians want to avoid using their bank accounts when they want to make a deposit. The reason behind this is the reduction of the credit score. Almost every bank has a policy where they check a customer’s background before approving them for a loan.

If that background includes weekly or monthly transactions to a gambling website, the customer’s credit score will be significantly reduced, and will thus become far less eligible for a loan in the future.

With cryptocurrencies, the banks have 0 access to the user’s transaction history and therefore can never find out whether or not they’ve spent money on this activity in the past.

The unauthorised websites don’t necessarily hide the fact as well, they’re quite open about it.

Victor Austin, the Senior Marketing Manager of Casinos-Australia.net commented on the issue by trying to emphasise the importance of allowing cryptocurrencies on the platform and sometimes even avoiding an application for a license:

“It’s true that there are a lot of websites that don’t have the necessary license. However, the license doesn’t really do anything. It’s mostly a piece of paper that a company buys for about a million Australian Dollars, thus signaling the government that they have what it takes to pay the winners.

There are no implications for correct conduct, refunding customers, adhering to the privacy policy and etc. The only thing the government focuses on is the KYC and AML rules.

By subverting these costs and offering cryptocurrencies to users, we are not only retaining capital to better ensure that everybody is paid but also retaining capital to make the gaming experience far less risky.

You can find that on pretty much every exchange nowadays. Everybody is trying to gather up capital and then invest it to improve their user experience.

It’s not like platforms like we don’t adhere to KYC and AML rules as well. We have to be registered somewhere, right? And no matter where you are in the world, those rules apply. This is why large deposits always require some form of identification from the customer. Smaller ones that are not reminiscent of any type of fraud are processed immediately.

The ACMA’s decision to crack down on platforms that aren’t authorized seems like another step towards a monopoly for their biggest gaming companies.”

Will this spill over to other industries as well?

Experts are concerned that this “no license no business” attitude in Australia can spill over to other industries as well.

It’s important to remember that a license is relevant for crypto exchanges, but it’s not necessarily relevant for an e-commerce store. If a platform accepts cryptocurrencies, there is no moral obligation for acquiring a license unless they can’t showcase the transactions in full.

Such pressure on control could eradicate small businesses and lead to monopolies in many sections. The United States is already facing massive issues with the blurring out of its antitrust law with all of the mergers and whatnot.

It’s very dangerous to have a large economy such as Australia go down a similar path. The maintenance of small businesses is absolutely essential for better development in the future. The United States seems to have distanced itself from that understanding and is starting to focus on the capital gain in the short term rather than the long term.

Giorgi Mikhelidze
Giorgi Mikhelidze

Giorgi is a Georgia software developer with two years of experience trading on the financial markets. He is now working to spread the knowledge about the Blockchain in his country and share all of his findings and research to as many crypto enthusiasts as possible.

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