Australia Proposes Stricter Crypto Regulations to Address Financial Crimes
Australia has implemented new regulations aimed at combating financial crimes in the cryptocurrency sector. The Australian Transaction Reports and Analysis Center (AUSTRAC) proposed these changes as part of updates to the Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) Act, which was amended and passed by Parliament in November.
The AUSTRAC draft rules focus on stricter compliance measures for businesses in high-risk sectors, including crypto exchanges, real estate, and legal services. Public consultation on this framework will remain open until February 2025.
Key Changes in Proposal
Proposed changes include:
- Stricter customer due diligence (CDD) requirements, mandating businesses to verify customer identities using risk-based processes.
- Enhanced monitoring of transactions for suspicious activity and increased transparency in cross-border asset transfers.
- New reporting obligations requiring detailed operational records from businesses.
- An outcomes-based compliance model that adjusts regulatory standards based on a business's size, structure, and risk profile.
- Updates to existing rules, such as the AML/CTF General Rule 2025 and the AML/CTF (Exemptions) Rule 2007, retaining relevant exemptions while eliminating outdated requirements.
Growing Concerns Over the Illicit Use of Crypto in Australia
AUSTRAC's decision to tighten regulations stems from a recognized need to address cryptocurrency misuse in Australia. On December 6, AUSTRAC announced the formation of a task force to regulate crypto ATM providers, which are often exploited for illegal activities. This task force is responsible for ensuring compliance with minimum standards.
Australia aims to strengthen its financial regulatory framework by addressing vulnerabilities within the crypto sector. The government encourages stakeholders, including financial institutions and crypto firms, to contribute during the consultation period to inform final regulations.