FACT SHEET: Checklist for setting up a Cryptocurrency (Virtual Asset) Exchange in Australia

Before you set up a cryptocurrency exchange…

☐  Determine the service(s) you will provide as part of your cryptocurrency exchange, and what will be traded.  For example, consider:

• Will you exchange crypto to fiat, crypto to crypto, or both?
• What virtual assets will be exchanged?
• Will you operate as a broker or market maker?
• Will you provide e-wallets?
• Will you provide other services (cross-border payments, DeFi, etc)?

☐  Determine the structure of your cryptocurrency exchange.  For example:

• Will you operate as a broker or market maker?
• Will it be centralised or decentralised?
• How will you maintain liquidity?
• What services will be outsourced (if any)?

☐  Draw up an end-to-end funds flow, and crypto flow, diagram

☐  Determine your target market and, if you are located overseas, what services will be provided in Australia

☐  Set up an Australian entity (if required)

☐ Seek legal advice on which Australian regulatory regimes apply

• Do you need an Australian Financial Services Licence (AFSL)?
• What are your obligations under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Regime?
• Do any banking laws apply?

☐ Prepare and lodge an AFSL application (if required)

☐ Design and implement an AML/CTF Program including an AML/CTF Risk Assessment (if required)

☐  Enrol and register as a Digital Currency Exchange with AUSTRAC (if required)

☐  If you will outsource any functions, ensure appropriate outsourced agreements are drafted and executed

☐ Draft Terms and Conditions, Privacy Policy and Data Breach Policy for your exchange

☐ Draft Financial Services Guide and Product Disclosure Statement (if required)

☐ Review promotional material for compliance with Australian consumer laws

Next steps

Read our blog on 5 Frequently asked Questions for setting up a Cryptocurrency exchange in Australia.

If you have any questions, please contact us to speak to our team.

Author: Sarah Archer (Senior Associate)