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Australia Targets Crypto ATMs in Crackdown on Money Laundering Risks

December 6, 2024

Australia's financial intelligence agency AUSTRAC is launching a task force to regulate crypto ATM providers, targeting money laundering risks and ensuring compliance with anti-money laundering (AML) laws.

Background

  • The Australian Transaction Reports and Analysis Centre (AUSTRAC) announced plans on December 6 to focus on the cryptocurrency industry in 2025, with a specific emphasis on crypto ATM providers
  • According to AUSTRAC, crypto assets and crypto ATMs are attractive to criminals for money laundering due to their accessibility and the ability to process irreversible transactions quickly
  • Crypto ATM operators in Australia are already required to adhere to strict regulations, including registering with AUSTRAC, monitoring transactions, implementing Know Your Customer (KYC) checks, and reporting suspicious activities or large cash deposits over $6,500 (10,000 AUD)
  • Non-compliant operators face severe penalties, including fines exceeding $100,000 or jail sentences of up to 25 years for laundering significant sums of money

Why should you pay attention?

  • Enhanced regulation: This move highlights Australia's commitment to strengthening oversight of the growing crypto asset sector
  • Increased compliance: Crypto ATM providers will face stricter scrutiny, ensuring they adhere to AML laws and reduce risks of criminal exploitation
  • Broader implications: With crypto adoption on the rise globally, this regulatory push could influence similar actions in other jurisdictions
  • Criminal deterrence: By targeting high-risk, non-compliant operators, AUSTRAC aims to deter illicit activities in the rapidly evolving crypto space

Who said what?

  • Brendan Thomas, CEO of AUSTRAC, emphasized the agency’s objectives:
“This is the first step in AUSTRAC’s focus to reduce the criminal use of cryptocurrency in Australia. We will be focusing on this industry over the course of next year”
“Cryptocurrency ATM providers need to ensure they are complying with their money laundering obligations. If they’re ignoring those obligations, they risk being subject to significant financial penalties"
  • AUSTRAC’s official statement:
“The task force will ensure crypto ATM operators meet minimum standards to negate the risk of illicit cash passing through the machines”

Zooming out

  • The establishment of this task force reflects a global trend toward stricter crypto regulations, as authorities seek to balance innovation with security
  • Australia’s proactive approach highlights the growing concern over criminal exploitation of digital assets, particularly via crypto ATMs
  • The move could set a precedent for other countries, urging them to tighten their regulatory frameworks to address similar vulnerabilities
  • While the industry welcomes clarity, operators must adapt quickly to avoid severe penalties, ensuring compliance with evolving AML requirements
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