Australians do not need a 'social credit score' to purchase cryptocurrency

A false claim that Australians require a “social credit score” of 100 to purchase cryptocurrencies like bitcoin has been shared in social media posts in multiple countries. The posts appear to have misrepresented how financial institutions verify their customers’ identities — a points system that an expert told AFP is not comparable to “social credit”. Australia’s financial crimes watchdog also told AFP that “social credit scores” do not exist in Australian law.

“BREAKING: Australian citizens can only access Bitcoin if they have enough social credits – Report,” reads in part a post published on Facebook here on December 20, 2022.

“According to a new law, Australian citizens need at least a 100 score of social credits before performing any digital transaction. This including crypto trading or accessing the web. The decision to implement a social credit points system for its citizens has generated an uproar, especially on social media,” the post says.

Social credit appears to reference a system used in China that, according to the Hong Kong-based South China Morning Post newspaper, ranks citizens and companies on their trustworthiness.

Those with favourable social credit scores could receive perks, while those with a bad score could see themselves barred from higher education or public transport.

The Facebook post also says Australian regulators recently launched a new law requiring citizens to have “100 points of ID” before they can use social credit, and links to an article on the website.

A screenshot of the misleading Facebook post, captured on December 27, 2022

Similar claims were shared by Facebook users based in Australia here, here and here, and in French by a Canada-based user here.

It was also shared on Twitter here, here and here by users with thousands of followers.

The posts link to similarly worded and formatted articles from December 2022 on the websites, News 4 Social and Crypto News Flash, which has since been removed.

The headline on the article appears to have been updated to say: “Australian citizens can only access Bitcoin if they have enough social credits – more sources needed.”

The claim, however, is false.

‘Know your customer’ requirements

Institutions that provide cryptocurrency services in Australia are deemed to be reporting entities, and need to be registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC), which monitors abuse within the financial system.

These institutions are obligated to comply with legislation aimed at curbing money laundering, terrorism financing and other serious crimes.

This includes having a system to verify a customer’s identity before they provide a service to that customer.

“The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) requires Digital Currency Exchange (DCE) providers to implement systems, processes and controls within their business to mitigate criminal misuse,” an AUSTRAC spokesperson told AFP via email on January 16.

Other countries, such as the United Kingdom, also have “know your customer” requirements.

The AUSTRAC spokesperson added the AML/CTF Act “does not require the checking of ‘social credit’ scores, which do not exist in Australian law”.

‘Not an accurate comparison’

The articles linked to by the misleading social media posts also makes mention of a new law in Australia that prevents citizens from using social media unless they have “100 points of ID”.

The “100 points of ID” appears to refer to a weighted score system that Australian financial institutions and authorities use to determine whether a person has produced sufficient documentation to verify their identity.

The system is part of Australian law, and a “cash dealer” — such as banks, casinos, or gambling houses — are legally required to carry a record of undergoing the verification procedure with the person holding the account, which assists the enforcement of taxation laws and other legislation.

For example, the Australian Federal Police’s checklist assigns 70 points to passports, 40 points to driver’s licences and 25 points to credit cards and bank statements. The public must produce enough documentation so they collectively carry 100 points or more in order to satisfy the requirement.

Failing to meet the 100 point identification requirement could lead to customers being excluded from essential financial services, however AUSTRAC has a guide on alternative verification procedures.

Peter Rogers, a senior lecturer at Macquarie University’s School of Social Sciences, told AFP: “These kind of proof of ‘identity points’ schemes are not, to the best of my knowledge, comparable to ‘social credit points’ schemes – certainly not as it is conceived of, or operated, in China.”

Rogers, who has written about China’s social credit system, said in an email on January 10: “The links imply that ‘identity points’ are a ‘social credit score’, designed to limit access to services, but in this case it’s not a useful or accurate comparison.”

AFP has previously debunked a similar claim about a social credit requirement for social media use, which also misinterpreted a proposal about requiring Australians to verify their identity.