Australia Targets Crypto Industry with Stricter Rules

Australia is tightening its grip on cryptocurrency regulation with new proposals aimed at preventing financial crimes such as money laundering and terrorist financing.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has laid out plans to strengthen oversight, targeting high-risk industries like crypto exchanges, real estate, and legal services. This comes after recent updates to the country’s Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) framework, reflecting an ongoing push to bring the crypto sector under more stringent control.

One of the central aspects of these new rules is the enhanced customer due diligence (CDD) requirements for businesses. Firms in high-risk sectors, including crypto services, will be required to verify identities, track suspicious transactions, and maintain greater transparency in cross-border asset movements.

Additionally, AUSTRAC is looking to implement stricter measures for international transfers and a refined approach to the “Travel Rule,” aiming to ensure compliance across borders.

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In an effort to reduce burdens on businesses, the proposed framework includes an outcomes-based compliance model. This will allow businesses to design their compliance strategies based on their risk profile, size, and business structure, rather than adhering to one-size-fits-all mandates. The goal is to improve efficiency while maintaining high standards to mitigate the risk of illicit activity.

AUSTRAC has opened the consultation process, inviting feedback from stakeholders, including financial institutions and crypto exchanges, which will be reviewed until February 14, 2025. This latest initiative follows a series of regulatory steps, including the creation of a task force focused on regulating crypto ATM providers to prevent their use in illicit activities.

Alexander Zdravkov