Australia’s financial crime watchdog, AUSTRAC, has announced the formation of a new cryptocurrency task force aimed at identifying and penalizing crypto ATM providers that fail to comply with anti-money laundering (AML) regulations.
AUSTRAC CEO Brendan Thomas warned crypto ATM operators that failure to meet compliance standards could result in severe penalties. The task force, which was launched on Friday, is designed to ensure that digital currency exchanges (DCEs) offering crypto ATM services adhere to strict AML/CTF (Anti-Money Laundering and Counter-Terrorism Financing) laws. The initiative is part of a broader effort to curb the use of crypto ATMs for fraudulent activities, scams, and criminal transactions.
Stricter Oversight of Crypto ATM Providers
Under the AML/CTF Act 2006, all DCEs—including crypto ATM operators—are required to register with AUSTRAC. Additionally, these providers must implement robust measures to monitor transactions, verify customer identities (via Know Your Customer, or KYC processes), report suspicious activities (Suspicious Matter Reports, or SMRs), and file threshold transaction reports for cash transactions of $10,000 or more.
Brendan Thomas emphasized that crypto ATM providers must meet these legal obligations or risk facing significant financial penalties. “Cryptocurrency ATM providers need to ensure they are complying with their money laundering obligations and are reducing the risks of crime,” he said. “If they’re ignoring those obligations, they risk being subject to significant financial penalties, and AUSTRAC won’t hesitate to take action.”
AUSTRAC’s Ongoing Focus on Crypto Crime
Thomas also highlighted that this task force represents the first step in AUSTRAC’s larger goal of reducing the criminal use of cryptocurrencies in Australia. He confirmed that AUSTRAC would be focusing on this sector throughout the next year to ensure greater compliance and prevent misuse of digital assets.
Currently, AUSTRAC has registered around 400 digital currency exchange providers, but only a few of these operators are involved in crypto ATM services. Despite this, Australia is home to approximately 1,200 crypto ATMs, making it the third-largest market globally for such machines. The rapid expansion of crypto ATM infrastructure has prompted regulators to take a more active role in ensuring compliance with anti-money laundering laws.
Rising Crypto Adoption in Australia
Australia’s crypto landscape has been expanding rapidly, with approximately 31.6% of Australians having either owned or currently owning cryptocurrencies, including NFTs. The increasing adoption of digital assets has prompted the Australian Securities and Investments Commission (ASIC) to introduce new regulations to enhance consumer protection.
This week, ASIC opened a public consultation on proposed updates to its digital asset guidelines, aiming to clarify how the Corporations Act 2001 applies to digital assets and provide better guidance to financial services entities dealing with these assets. Additionally, new licensing requirements now mandate that crypto exchanges managing significant client assets must obtain an Australian Financial Services License (AFSL).
Combatting Crypto Crime
Australia’s heightened focus on crypto regulation comes in the wake of a massive crypto scam that was uncovered earlier this year, which targeted Australian investors. The scam used a technique known as “approval phishing,” which led to over $4 billion in stolen cryptocurrency globally since May 2021. This scam, which affected more than 2,000 Australian digital wallets, highlighted the growing need for tighter regulations in the sector.
With these latest steps, AUSTRAC and ASIC are aiming to secure Australia’s growing crypto ecosystem, ensuring that it remains safe from criminal exploitation while continuing to support innovation and legitimate market participants.
