Australia Proposes Stricter Regulations for Crypto Industry to Tackle Financial Crimes

The bitcoin business and other high-risk industries are the focus of Australia’s plan to strengthen Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) laws. The Australian Transaction Reports and Analysis Center (AUSTRAC) is leading the effort to develop the proposed framework, which expands upon the AML/CTF Act’s recent modifications that were passed in November.

By strengthening monitoring, imposing more stringent customer due diligence (CDD) standards, and putting in place strong reporting duties, the revised guidelines seek to close regulatory gaps. The proposed rules would increase surveillance of high-risk industries, including as legal services, real estate companies, and cryptocurrency exchanges.

Businesses would need to adopt risk-based processes to verify customer identities, monitor suspicious activities, and maintain transparency in cross-border transfers. Additionally, the proposal introduces tighter obligations under the Travel Rule, ensuring that international asset transfers remain traceable.

Consultation and Flexible Compliance Framework

AUSTRAC has opened the draft rules for public consultation until February 14, 2025, encouraging feedback from industry stakeholders, particularly within the crypto and financial services sectors. This collaborative approach aims to create a comprehensive framework that balances regulatory enforcement with industry needs.

To reduce compliance burdens, the proposal outlines a shift from a prescriptive structure to an outcomes-based compliance model. This adjustment allows businesses to design tailored compliance strategies based on their size, structure, and risk profile while maintaining rigorous standards.

Updates to the AML/CTF (Exemptions) Rule 2007 and the AML/CTF General Rule 2025 are also included in the framework. In order to provide continuity and stability for impacted firms, these modifications seek to maintain necessary exemptions while eliminating antiquated rules.

Australia’s proposed reforms demonstrate its commitment to preventing unlawful activities in a fast changing financial ecosystem by concentrating on areas that are susceptible to financial crime. The final version of the framework is anticipated to establish a new benchmark for AML/CTF compliance in the area as AUSTRAC gathers input from the industry.