Australia has unveiled a proposal for stricter Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) rules to bolster oversight of the cryptocurrency sector and curb financial crimes. The draft framework, introduced by the Australian Transaction Reports and Analysis Center (AUSTRAC), aims to close regulatory gaps and enhance transparency in high-risk sectors.
Key Changes in Australia’s Proposed Framework
The proposed rules, which build on amendments to the AML/CTF Act passed by Parliament in November, are designed to:
- Expand oversight to include high-risk sectors such as cryptocurrency exchanges, real estate, and legal services.
- Strengthen customer due diligence (CDD) measures, requiring businesses to verify customer identities through risk-based processes.
- Enhance reporting obligations, including stricter adherence to the Travel Rule for international asset transfers.
- Adopt an outcomes-based compliance model, allowing businesses to tailor compliance measures to their size, structure, and risk profile while maintaining rigorous standards.
The framework retains necessary exemptions from previous regulations, such as those outlined in the AML/CTF General Rule 2025 and the AML/CTF (Exemptions) Rule 2007, while removing outdated requirements to maintain stability and continuity.
Open Consultation Period
AUSTRAC is seeking public and industry feedback on the draft framework until February 14, 2025. The regulator encourages input from key stakeholders, including cryptocurrency exchanges, financial institutions, and legal practitioners, to shape the final version of the rules.
This proposal is part of a broader effort by Australian authorities to tighten regulations in the crypto sector. On December 6, AUSTRAC launched a task force to monitor crypto ATM providers, ensuring compliance with minimum standards to prevent the misuse of cryptocurrency for illicit activities.
AUSTRAC emphasized the task force’s role as a “first step” toward reducing the criminal use of crypto in Australia. The move signals a continued push for accountability and oversight within the digital asset ecosystem.
