Do consumers need a ‘Bit’ more protection under Australian consumer laws? The regulatory risks and challenges of Bitcoin

The creation of Bitcoin, as a digital currency, has been a significant development in the world of finance, in that it provides an alternative method of payment to consumers and businesses who use Bitcoin as a means to buy or sell goods or simply as an investment arrangement. The use of Bitcoin, as a decentralised peer-to-peer network, provides numerous benefits as a payment system, but at the same time, creates challenges for consumers due to its unregulated nature and volatile status. Therefore, when Bitcoin users enter into agreements with Initial Coin Offering (ICO) hosted companies and Bitcoin exchange platforms, the conduct by these ICOs and exchanges may be misleading and unconscionable in relation to the information they disclose to the Bitcoin user (as a consumer). This paper will consider the application of the Competition and Consumer Act 2010 (Cth) and whether the Australian Consumer Law is suited to take into consideration Bitcoin transactions under the misleading and unconscionable provisions

Future digital money: The legal status and regulation of bitcoin in Australia

Virtual and digital crypto-currencies, specifically Bitcoin, were developed by an anonymous pseudonym ‘Satoshi Nakamoto’ in 2009 and have become a developing form of payment system used by businesses and consumers. Unlike traditional payment systems, Bitcoin is a peer-to-peer network with unique characteristics. Bitcoin is a private, anonymous and decentralised network that is intended to work independently from a government or banking authority. Bitcoin is therefore a network dependent upon mathematical algorithms between two users and managed through a process called ‘mining’, which is then stored within a user’s private ‘wallet’. This innovative technology offers numerous opportunities as a payment system; however, the legal challenges and risks it creates can be detrimental to consumers and businesses that use Bitcoin as an alternative payment system. The legal challenges of Bitcoin cause uncertainty for governments, businesses and consumers on the treatment of Bitcoin as an acceptable means of payment in Australia. Therefore, the purpose of this thesis is to determine whether Bitcoin is a form of ‘money’ and as such ought to be accepted as legal tender by the Australian Government under specific legislative instruments. Furthermore, this thesis will examine how Bitcoin is used to facilitate money laundering activities. Moreover, this thesis considers the treatment of tax within Bitcoin transactions and how unregulated Bitcoin transactions can be used to avoid tax. In addressing these legal issues and concerns, consideration is given to the possible regulation of virtual and digital currencies like Bitcoin in Australia. This thesis considers Australian banking, money laundering and taxation legislation and examines whether these regulatory frameworks are suitable to include Bitcoin as a payment system in order to limit money laundering and tax evasion activities within Bitcoin payment systems. Additionally, this thesis examines regulatory approaches to virtual and digital currencies in foreign jurisdictions, namely the United States, Canada and the European Union in order to gain some insight into how other countries are regulating Bitcoin as a payment system. This thesis arrives at a number of conclusions relevant to the possible regulation of Bitcoin in Australia. Firstly, it identifies Bitcoin as money and a form of payment system, but not legal tender and therefore not an accepted legal currency in Australia, which considers self-regulation of Bitcoin as a payment system a possibility. Secondly, it recognises that existing money laundering legislation can be amended to include Bitcoin as a payment system through which money laundering can take place and where Bitcoin exchange platforms are required to implement a ‘know-your-customer’ policy or ‘know-your-user’ policy. Thirdly, this thesis identifies that Bitcoin is recognised as a commodity for tax purposes and that suitable guidelines can be introduced on how to deal with tax activities and tax evasion within Bitcoin payments. Lastly, it is also recommended that international organisations such the Financial Action Task Force and International Monetary Fund could provide clarity on the treatment of virtual and digital currencies, specifically Bitcoin, as a payment system and legal currency, given that Bitcoin in global and borderless. Therefore, this research contributes towards how the Bitcoin network operates, its legal challenges and regulation in order to further research in this area of law

Money laundering and the impact thereof on selected African countries : a comparative study

The variations that exist in the definitions or interpretations of money laundering is not relevant to the actual meaning of the term money laundering, but rather to the transactions that could be indicative of money laundering. Therefore money laundering becomes easier when poorly legislation creates loopholes that can be demoralised by criminal syndicates and terrorist financing. Since 1996, the South African Reserve Bank has been in negotiations with the International Monetary Fund (IMF), the United States Federal Reserve Bank and many European financial institutions to ensure that South Africa can compete in the International sphere. To comply with International banking standards, South Africa has promulgated a number of laws, for example The Prevention of Organised Crime Act of 1996, The Proceeds of Crime Act of 1997, The Money Laundering Control Act of 2000 and The Financial Intelligence Centre Act of 2003. Money laundering attracted increasing interest since the late 1980‘s. To control the increase in money laundering, a number of initiatives were adopted, for example the Financial Action Task Force on money laundering in 1989. The Eastern and Southern African countries also formed the Eastern and Southern Africa Anti-Money laundering Group (ESAAMLG) in 1999. The advances in technology and particularly electronic funds transfers brought a dramatic increase in organised crime. In respect hereof, South Africa received attention in terms of The Prevention of Organised Crime Act 121 of 1998 as well as the Financial Intelligence Centre Act 38 of 2001 to prevent the increase of money laundering. With South Africa returning into the International sphere, South Africa is becoming increasingly attractive to the practical dilemmas of money laundering. Certain challenges on money laundering have an impact on legislators, both in South Africa and Africa. These challenges include criminal syndicates profiting from criminal activities to financing of terrorism such as 11 September 2001. By using South Africa as an example against the selected African countries, it is indicated how the certain implications of money laundering undermine the legitimate private sector. One way to address the challenges of money laundering is that legislators must understand how these criminal syndicates operate as well as the terrorist financing thereof. This mini-dissertation gives an historical overview of what money laundering entails in South Africa as well as the selected African countries, the typologies thereof as well as the legislation dealing with money laundering in South Africa. It also provides the practical implications of implementing the money laundering measures in South Africa as well as the selected African countries against the background of the challenges and realities thereof. Money laundering is difficult to measure, but a preliminary attempt was made to give recommendations on this global predicament.Dissertation (LLM)--University of Pretoria, 2011.Mercantile Lawunrestricte

Affirmative Action and People with Disabilities: Is there a Cure for this Curse?

This paper is intended to deal withdisabilities under the affirmative action regime andhow to ensure that people with disabilities enjoy equalemployment opportunities more effectively. SouthAfrican norms must therefore be in conjunction withInternational standards and norms to create moreeffective affirmative action policies and to ensure thatpeople with disabilities have a right to equality, notonly internationally, but also in South Africa