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Austrac’s Crackdown on Crypto and Remittance Firms Over AML Failures

Australia’s financial crime regulator, AUSTRAC, has intensified its oversight of the crypto and remittance sector, targeting 13 digital currency exchange and remittance providers for compliance failures. This latest regulatory push underscores growing concerns over anti-money laundering (AML) and counter-terrorism financing (CTF) shortcomings in the industry.

AUSTRAC’s CEO Brendan Thomas has warned that these alerts may lead to regulatory action, particularly for companies failing to report suspicious transactions and activities. This move comes after a year-long review into reporting failures, signaling the regulator’s determination to enforce compliance across financial service providers.

Over the past year, AUSTRAC has actively scrutinized crypto and remittance firms for failing to meet their AML/CTF obligations. This campaign has already resulted in significant regulatory actions, including the cancellation, suspension, and refusal of registration renewals for nine providers. Additionally, two more firms were placed under strict conditions, with potential further penalties if they fail to comply.

Thomas emphasized the seriousness of the issue, stating, “Late last year AUSTRAC cancelled, suspended, and refused renewals of registration for nine providers that had failed to meet their obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act.”

Firms Facing Charges, Delistings, and Regulatory Penalties

Several financial service providers are now facing severe consequences due to their non-compliance. Officials at companies such as Auaisa Trading Pty Ltd, Amco Travelling and Exchange Pty, and Blue Star Exchange Pty Ltd are subject to serious charges. Some of these entities have already faced convictions or are involved in legal disputes, further damaging their reputations.

Meanwhile, three digital currency businesses—DIGI-SEND E-Money Pty Ltd, Rootie Technology Pty Ltd, and Jinte Net Blockchain Pty Ltd—have ceased operations that required AUSTRAC registration. This highlights the regulator’s growing influence in shutting down high-risk operators.

Currencyfair Australia Pty Ltd and Currencyfair Limited initially failed to meet registration deadlines but have since obtained conditional approval. Additionally, crypto firms Zipmex Australia Pty Ltd and FTX Express Pty Ltd were delisted from the Digital Currency Exchange Register due to insolvency, further signaling AUSTRAC’s tough stance on regulatory breaches.

Crypto and Investment Fraud Under Intensified Scrutiny

In addition to cracking down on non-compliant crypto and remittance firms, AUSTRAC has taken broader measures to address financial crime risks. In December, the agency launched a dedicated crypto task force to monitor and enforce regulations on crypto ATM providers and other digital asset exchanges.

Under Australia’s AML/CTF Act 2006, all digital currency exchanges (DCEs), including crypto ATM operators, must be registered with AUSTRAC. These businesses are also required to:

Track transactions and maintain audit trails
Conduct stringent Know Your Customer (KYC) procedures
Report Suspicious Matter Reports (SMRs)
Submit Threshold Transaction Reports (TTRs) for cash transactions exceeding AUD 10,000

Regulatory agencies have also intensified their fight against crypto-related fraud. The Australian Securities and Investments Commission (ASIC) reported significant successes in dismantling fraudulent investment schemes. Since July 2023, ASIC has:

Shut down over 5,500 fraudulent investment websites
Removed more than 1,000 phishing links
Disabled 615 crypto scam platforms

These fraudulent activities, often promoted through fake news and deepfake videos featuring prominent public figures, have led to an estimated $1.3 billion in losses in 2023 alone. AUSTRAC’s increased oversight is a direct response to these growing threats, ensuring that financial service providers maintain transparency and accountability.

The Global Trend in Crypto Regulation

Australia is not alone in tightening its crypto regulation. Governments and financial watchdogs worldwide are increasing their efforts to ensure crypto markets comply with AML laws. The Financial Action Task Force (FATF), the global money-laundering watchdog, has urged nations to enforce stricter controls, particularly on digital currency transactions.

In the United States, the Financial Crimes Enforcement Network (FinCEN) has introduced new rules requiring crypto firms to report transactions exceeding $10,000. The European Union has also been moving towards implementing the Markets in Crypto-Assets Regulation (MiCA), which aims to bring consistency in crypto regulation across member states.

This global shift towards stringent regulation reflects the increasing risks associated with digital currencies. Criminal organizations have exploited the pseudo-anonymous nature of blockchain transactions for illicit activities, prompting regulators to close loopholes that enable money laundering and terrorism financing.

How Crypto Firms Can Strengthen Compliance

With regulatory scrutiny intensifying, crypto businesses must implement robust compliance frameworks to ensure they adhere to AML laws. Here are some best practices for crypto service providers:

Enhanced Due Diligence (EDD): Crypto firms should conduct thorough customer risk assessments, particularly for high-risk transactions and politically exposed persons (PEPs).
Automated Transaction Monitoring: Leveraging AI-driven monitoring tools can help detect unusual transaction patterns and potential money-laundering attempts.
Regular AML Training: Employees should be trained regularly on the latest AML/CTF compliance practices to ensure awareness of regulatory obligations.
Strong Internal Controls: Implementing strict policies and internal governance structures can mitigate risks associated with non-compliance.
Collaboration with Regulators: Engaging with financial regulators can help firms stay updated on evolving compliance expectations and avoid legal repercussions.

By adopting these measures, crypto firms can not only avoid penalties but also build trust among regulators and customers, reinforcing the legitimacy of their operations.

Conclusion: A New Era of AML Enforcement in Australia

AUSTRAC’s regulatory actions send a strong message to crypto exchanges and remittance providers: compliance failures will not be tolerated. The growing focus on AML and CTF regulations in the digital finance space reflects global trends, where authorities are tightening controls over crypto transactions to mitigate financial crime risks.

For crypto businesses operating in Australia, adherence to AML/CTF requirements is now a non-negotiable aspect of maintaining legitimacy. As AUSTRAC continues its crackdown, the industry must prioritize robust compliance frameworks to avoid penalties, suspensions, and potential legal actions.