AUSTRAC (Australian Transaction Reports and Analysis Centre) found that cryptocurrency was increasingly being exploited for money laundering, scams and money mule activities, as an increasing number of Australians were falling victim to fraudsters.
To take preventative action, the government agency will ensure digital currency exchanges that provide crypto ATM services have strict practices implemented to minimise the risk of their machines being used to move money associated with fraudulent activity.
Crypto ATMs are an attractive venue for criminals looking to launder money, as they are accessible and make instant and irreversible transfers. ATMs found to disregard anti-money laundering laws will be subject to financial penalties.
Currently, Australia has 1,200 operating crypto ATMs, while about 400 digital currency exchange providers are registered with AUSTRAC.
Previously, due to government inaction, the country’s AML/CTF regime fell short of international standards, posing risks of becoming a potential hub for money laundering.
This regulatory gap increased the likelihood of Australia being 'grey-listed' by the Financial Action Task Force (FATF), potentially harming the economy.
Moreover, a report by Transparency International Australia (TIA) highlights regulatory gaps allowing illicit funds from Cambodia to flow into Australia, notably affecting the real estate market. Between 2019 and 2023, Cambodian foreign individuals acquired 118 properties worth USD 110 million. In 2022 alone, over USD 516 million was transferred from Cambodia to Australia, raising concerns about the disproportionate flow of funds relative to Cambodia’s overall wealth.
These factors pushed Australia to take action. In May 2024, the Australian Government allocated USD 74.5 million towards implementing reforms for the country’s AML/CTF regime, signalling a commitment to address financial system abuse.
This budget allocation empowered AUSTRAC to implement the new regime, assist industries in fulfilling their obligations, and offer comprehensive education and guidance, particularly to newly regulated entities.
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