AUSTRAC tracks every AUD-Bitcoin conversion

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blog It’s hard to believe in many ways how quickly Bitcoin has changed from being a minor Internet oddity into the mother of all crypto-currencies — a giant whose impact is creating massive tidal waves around the global financial system. Well, at least we now know how closely the Feds are tracking it. The Australian Transaction Reports and Analysis Centre (AUSTRAC) admitted in a Senate Estimates session in Canberra this week that it is literally tracking every conversion between Bitcoins and Australian dollars. Wow. Talk about privacy-invasive. ZDNet has a great story on this (we recommend you click here for the full yarn). The site reports:

“Australia is very fortunate among its international counterparts, in that we are one of the few countries which currently collects all international funds transfers, into or out of Australia,” John Schmidt, CEO of Austrac, told Senate Estimates today. “… “Because we get the international funds transfers instructions, it is possible using other intelligence sources to identify transactions where people are purchasing bitcoins.”

To my mind, this exposes a security and privacy weakness of the currency conversion process with Bitcoin, in that it appears to depend on the international funds transfer system. Although I’m sure most people’s usage of Bitcoins is entirely harmless, I am sure there is substantial potential for abuse of what little privacy rights Australians have left from AUSTRAC’s comprehensive tracking system here.

I’m not sure to what extent AUSTRAC is actively storing all these transactions, or whether it just has the capacity to but is not using it unless there’s a criminal case involved. But I’d certainly like to see the agency step back a little and not track every Bitcoin conversion by default. Just because you can track every piece of Bitcoin/AUD transactional data, does not mean that you should. And perhaps an inquiry should be set up at some point into how to ensure privacy remains an important concept in the crypto-currency age. I suspect these issues will become rather less than academic as crypto-currencies become more mature as a concept.

Image credit: antanacoins, Creative Commons

5 COMMENTS

  1. pffft. nothing privacy invasive here at all.
    The BTC ledger is PUBLIC information… if they use a bank service to convert it to BTC they’re using a state owned currency. of course they are tracking those transactions, it would be irresponsible of them NOT to.

    having said that there is bugger all they can do about barter and cash transactions on the street.I can give a btc transaction printed on a piece of paper to a guy standing on a street corner, and he could hand me a wad of cash.
    Good luck tracking that transaction AUSTRAC

    • “Good luck tracking that transaction AUSTRAC”

      lol

      Some guy in AUSTRAC right now is likely thinking to himself: “Challenge accepted.” *calls ASIO*

      • ahh well that is a different matter all together.

        mind you, ASIO would still have their work cut out…

        If I were wanting to do it, i’d be considering encryption, stenography etc
        translating it into Aus cash means the money could be traced at the cash end, but the BTC side would be very difficult to track.

  2. Convert to USD or GBP and then purchase BitCoins? Non-Australian exchanges don’t accept AUD anyway, so you’d have to convert to an accepted currency to then convert into BTC.

    Are they doing it for BitCoins in particular, or do BitCoin conversions just get caught in the same net as all AUD conversions?

    If they can track AUD > BTC then I’d assume they can track AUD > * and given the current climate I’d say that if they can track it then they will track it and store it for as long as they can.

  3. A lifetime ago Mondex was an “interesting” concept. Mondex card owner could transfer money to the card from an account in (say) the Bahamas and then using a Mondex to Mondex interface money could be transferred from one card to another without any “authority” being the wiser.

    Australian authorities took a deep breath and then expressed their concerns. Mondex went nowhere

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