AUSTRAC cracks down on crypto ATM providers to combat financial crime

Australia's financial intelligence agency, AUSTRAC, is intensifying its crackdown on cryptocurrency ATM providers failing to comply with the country's strict anti-money laundering regulations.

Citing heightened risks, AUSTRAC revealed that cryptocurrency is increasingly being exploited for money laundering, scams, and money mule activities.

In response, the agency has launched a dedicated cryptocurrency task force to ensure digital currency exchanges offering crypto ATM services adhere to regulatory standards aimed at preventing criminal misuse.

Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, cryptocurrency service providers are required to register with AUSTRAC, conduct transaction monitoring and "know your customer" checks, file suspicious matter reports, and submit threshold transaction reports for cash transactions exceeding $10,000.

AUSTRAC CEO Brendan Thomas underscored the urgency of the issue, stating that cryptocurrency and ATMs are attractive avenues for criminals due to their accessibility and the speed of transactions.

"We've seen an alarming number of Australians falling victim to cryptocurrency scams, with some losing their entire life savings, which is devastating," Thomas said.

"The growing use of cryptocurrency is paralleled by increasing criminal exploitation. This task force is AUSTRAC's first step in eliminating high-risk, non-compliant operations. Providers ignoring their obligations risk severe penalties, and AUSTRAC will not hesitate to take enforcement action," he added.

Australia currently has approximately 400 registered digital currency exchange providers, of which a small portion operates cryptocurrency ATMs. However, with over 1,200 crypto ATMs nationwide, Australia ranks third globally in the number of operational machines.

AUSTRAC emphasised its commitment to assisting DCEs in identifying financial crime risks through targeted resources and guidance.

Non-compliant operators failing to mitigate risks or report suspicious activities could face financial penalties or legal actions.

"This is only the beginning," Thomas noted, adding "AUSTRAC will continue to focus on reducing criminal exploitation of cryptocurrency in the year ahead."