Originally published on: December 12, 2024
Australia is taking a stand against financial crime with proposed stricter Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) rules targeting the cryptocurrency industry. These rules, put forth by the Australian Transaction Reports and Analysis Center (AUSTRAC), aim to enhance oversight and combat illicit activities.
Following recent amendments to the AML/CTF Act, the updated framework seeks to close regulatory loopholes, strengthen supervision of high-risk sectors, enhance customer due diligence (CDD) practices, enforce more stringent reporting requirements, and establish tighter rules for businesses operating in the crypto space.
AUSTRAC has opened the draft rules for public consultation until February 14, 2025, inviting input from industry stakeholders, especially those in cryptocurrencies and financial services, to help shape the final version of the regulations.
The proposed reforms include broader regulatory oversight of high-risk sectors like cryptocurrency exchanges, legal services, and real estate firms. They introduce requirements for stricter CDD, improved reporting group definitions, and tighter Travel Rule obligations for international transactions.
Under the proposed framework, businesses must conduct risk-based customer identity verification, monitor suspicious activities, and uphold transparency standards for cross-border asset transfers.
To reduce compliance burdens, the new regulations will adopt an outcomes-based approach, allowing businesses to customize compliance measures based on their specific size, structure, and risk factors while maintaining robust standards.
The proposal also includes the AML/CTF General Rule 2025 and the AML/CTF (Exemptions) Rule 2007, aiming to retain essential exemptions while eliminating outdated requirements to ensure stability and consistency.
Stakeholders, including financial institutions, legal professionals, and crypto exchanges, have until February 14, 2025, to provide feedback on the draft framework. This initiative reflects the increasing regulatory scrutiny on the crypto industry in Australia, as demonstrated by the recent establishment of a task force by AUSTRAC to oversee crypto ATM providers and mitigate money laundering risks in the country.
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