Australian Financial Watchdogs Back New Powers To Curb Money-Laundering Via Crypto

Australia's financial agencies are advancing proposals to curb money-laundering activities involving cryptocurrencies, particularly through crypto ATMs.

What Happened

The Australian Banking Association (ABA), along with AUSTRAC and Transparency International, supports amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act. If enacted, the AUSTRAC CEO would gain authority to restrict the use of high-risk mechanisms like cryptocurrency, should they pose significant risks to the financial system or community.

The Context

The proposed change comes as AUSTRAC identifies rising criminal activities associated with cryptocurrencies, including scams and the proliferation of crypto ATMs, which have increased from 23 machines in 2019 to approximately 2,000 today. With almost 150,000 transactions linked to these ATMs annually, there is concern over their role in facilitating illicit activities.

The Facts

• AUSTRAC aims to amend existing legislation to enable a broader regulatory approach to high-risk financial mechanisms.
• Approximately 99% of transactions via crypto ATMs are cash deposits, often linked to scams.
• The extent of misuse of crypto ATMs remains a significant concern, with further evidence needed to measure overall impact.

Why It Matters

The proposed legislation reflects a growing recognition of the need for robust financial regulations in the face of evolving technologies that facilitate crime. By potentially limiting the use of cryptos as a medium for dubious transactions, Australia aims to protect its financial system from exploitation.

What Comes Next

• Monitor whether the legislative change is passed and the specific powers granted to AUSTRAC.
• The largest unanswered question is how these powers will be defined and limited in their application.
• Changes in consumer behavior related to crypto ATMs may alter public perceptions and regulatory approaches in the future.