The Australian government is taking significant steps to address rising concerns over money laundering through high-risk products and services. Minister for Home Affairs, Tony Burke, has proposed new powers that would enable the CEO of AUSTRAC, the Australian Transaction Reports and Analysis Centre, to restrict or prohibit specific high-risk products, services, or delivery channels. This amendment aims to provide the AUSTRAC CEO with enhanced tools to mitigate the money laundering risks associated with these high-risk areas.
Brendan Thomas, the CEO of AUSTRAC, expressed his support for the proposed changes. He stated that if the law is passed by Parliament, AUSTRAC will be prepared to implement these new powers swiftly. “We’re still seeing an unacceptable risk of money laundering across some channels,” Mr. Thomas said. He emphasized that the new authority would allow for a more agile response to the evolving risk landscape.
The rise of cryptocurrency transactions poses a particular challenge in this regard. Mr. Thomas noted that crypto transactions are increasingly intertwined with money laundering activities. The proliferation of crypto ATMs has added another layer of risk, enabling users to convert cash into digital currency that can be sent instantly and often anonymously around the world.
To illustrate the rapid growth of this sector, Mr. Thomas highlighted that there were just 23 crypto ATMs in operation six years ago. By three years ago, that number had surged to 200, and following the establishment of AUSTRAC’s Crypto Taskforce at the end of last year, the count has reached 2,000 machines.
According to AUSTRAC’s Crypto Taskforce, an estimated 150,000 transactions occur annually through these crypto ATMs, moving approximately $275 million in value each year. Alarmingly, a significant portion of these transactions is linked to scams and the activities of money mules. In a review of 90 of the most frequent crypto ATM users across Australia, it was found that 85 percent were either victims of scams or money mules who had been deceived or coerced into transferring funds.
Demographics also reveal concerning trends, with individuals aged between 50 and 70 accounting for nearly 72 percent of the transaction value at crypto ATMs. This age group is notably vulnerable to scams, highlighting a critical need for protective measures.
The current Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime mandates that businesses conduct effective transaction monitoring and customer due diligence. They are required to submit reports on transaction thresholds and suspicious activities while managing transaction limits. However, organized crime continues to innovate, complicating efforts to enforce these controls effectively.
Mr. Thomas welcomed the proposed amendments, stating, “I welcome the Minister’s announcement to equip AUSTRAC with powers to better protect the community.” Further details regarding the proposed changes will be made available as the legislative process unfolds.
This initiative marks an essential step in combating high-risk financial activities in Australia, with the potential to enhance the regulatory framework aimed at safeguarding the public from evolving financial crimes.
