Originally published on: December 12, 2024
Australia is taking a stand against financial crime by proposing stricter Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) rules, particularly targeting the cryptocurrency industry. The aim is to tighten oversight and combat illicit activities within the sector.
Proposed by the Australian Transaction Reports and Analysis Center (AUSTRAC), these rules align with recent amendments to the AML/CTF Act passed by parliament in November. The goal is to close regulatory gaps, enhance supervision of high-risk sectors, implement stricter customer due diligence (CDD) measures, enforce more rigorous reporting obligations, and establish tighter rules for businesses.
Public feedback is crucial, and the draft rules are open for consultation until Feb. 14, 2025. AUSTRAC encourages industry stakeholders, especially those in the crypto and financial services sectors, to provide input to shape the final framework.
Enhanced regulatory oversight is a key focus, extending to high-risk sectors such as cryptocurrency exchanges, legal services, and real estate. The proposed reforms would mandate stricter CDD procedures, clearer reporting group definitions, and more stringent Travel Rule obligations for international transfers.
Businesses would be required to verify customer identities using risk-based methods, track suspicious transactions, and uphold transparency for cross-border asset transfers. In a bid to streamline compliance, the framework adopts an outcomes-based approach, allowing businesses to customize measures based on size, structure, and risk profile while upholding rigorous standards.
The proposal includes the introduction of the AML/CTF General Rule 2025 and the AML/CTF (Exemptions) Rule 2007, maintaining essential exemptions while eliminating outdated requirements for stability and continuity.
Since Dec. 11, AUSTRAC has sought feedback on the draft framework until Feb. 14, 2025, from stakeholders like financial institutions, legal practitioners, and crypto exchanges. This move reflects Australia’s growing regulatory attention to the crypto industry, observed in initiatives like the task force established on Dec. 6 by AUSTRAC to monitor crypto ATM providers.
The task force aims to ensure that crypto ATM operators meet minimum standards to prevent illicit funds from passing through machines. This marks a critical step in reducing the criminal use of cryptocurrency in Australia, showcasing the government’s commitment to upholding financial integrity and combating illicit finance in the digital realm.
