Australia tightens Crypto Regulations To Tackle Country's Rampant Crypto Crimes

Australia is tightening its grip on cryptocurrency regulation with new proposals aimed at preventing financial crimes such as money laundering and terrorist financing.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has laid out plans to strengthen oversight over high-risk industries like crypto exchanges, real estate, and legal services.

This comes after the country's recent Anti-Money Laundering and Counter Terrorist Financing framework, reflecting an ongoing push to being the crypto sector under more stringent control.

AUSTRAC CEO Brendan Thomas said the agency was seeing "too many "Australians falling victim to scams carried out through cryptocurrency.

"Cryptocurrency and crypto ATMs are attractive avenues for criminal looking to launder money, as they are widely accessible and make near-instant and irreversible transfers."

Proposal to increase oversight

This proposal didn't just come out of the blue. Instead, Australia has identified the urgent need to address the misuse of cryptocurrency within its borders. Hence the decision by AUSTRAC to step up its effort in that regard.

The updates would mandate stricter CDD, improved reporting group definitions and tighter Travel Rule obligations for international transfers.

This proposal also mandates that businesses must verify customers identities via risk based processes, monitor suspicious transactions and maintain transparency for cross-border asset transfers.

Streamlined Compliance for Businesses

The proposed framework also aims to reduce compliance burdens by transitioning to an outcomes-based model from the currency prescriptive structure.

Under the new approach, businesses are given greater flexibility to customise their compliance measures based on the size, structure and risk profile while maintaining rigorous standards.

Notably, the AML/CTF General Rule 2025 and AML/CTF (Exemptions) Rule 2007 have been introduced, retaining essential exemptions from previous regulations while eliminating outdated requirements to ensure regulatory stability and continuity.

Australia’s Increasing Focus on Crypto Regulation

On December 6, 2024, AUSTRAC employed a task force to oversee crypto ATM providers, which are the common targets of criminals for their shady businesses.

The task force has now saddled with the responsibility ensuring compliance with minimum standards to prevent illicit financial activities.

AUSTRAC has placed the draft of the proposal in the public and opened up to stakeholders-including financial institutions, legal practitioners and crypto exchanges-to provide feedback.