Australia has identified an urgent need to address the misuse of cryptocurrency within its borders.
By Mayowa Adebajo
Edited by Julia Sakovich
Updated
3 mins read
Australia has introduced a new set of rules that it hopes will help put up a better fight against financial crimes that have long terrorized the crypto sector. The new proposals were floated by the Australian Transaction Reports and Analysis Center (AUSTRAC) as part of wider efforts by the country to update its Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) Act.
In line with this ambition, the AML/CTF Act was duly amended and passed by the Parliament in November. So, now, the AUSTRAC draft rules aim to keep up with the pace by introducing stricter compliance measures for businesses involved in high-risk sectors. Such businesses include the likes of crypto exchanges, real estate, legal services, and other ones that might easily escape proper checks and oversight.
According to AUSTRAC, it is currently consulting the public on the matter of this new framework and will leave the lines open for feedback until February 2025.
Australia is proposing changes such as stricter customer due diligence (CDD) requirements. This mandates businesses to verify customer identities using risk-based processes. Companies will also be required to monitor transactions for suspicious activity and maintain greater transparency in cross-border transfers of assets.
Under these new rules, reporting obligations also take up a new shape. Now, businesses must ensure that they keep detailed records of their operations.
There is also an outcomes-based compliance model that this new framework proposes. This means that businesses are subjected to varying degrees of compliance as their size, structure, and risk profiles dictate. By doing this, regulatory standards are kept at their highest without necessarily burdening some firms more than others.
Finally, the proposal also includes updates to existing rules, such as the AML/CTF General Rule 2025 and the AML/CTF (Exemptions) Rule 2007. The goal of this is to retain as much as possible relevant exemptions and throw out those requirements that may not apply in today’s world.
It might be worth noting that AUSTRAC’s move to tighten regulations did not just come out of the blue. Now more than ever, Australia has identified an urgent need to address the misuse of cryptocurrency within its borders. Hence, the decision by AUSTRAC to step up its efforts in that regard.
On December 6, AUSTRAC announced the creation of a task force to oversee crypto ATM providers. These machines, often targeted by criminals for their shady businesses, are now under intensified scrutiny. The task force has now been saddled with the responsibility of ensuring that these providers meet minimum compliance standards.
Generally, Australia is keen on strengthening its financial regulatory framework, which can not be done without addressing the loopholes in the crypto sector. As a result, the government is now urging stakeholders, including financial institutions and crypto firms, to provide valuable input during this consultation period to help shape the final regulations.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.
