Australia’s AUSTRAC has taken decisive action against over 50 financial institutions, highlighting their non-compliance with anti-money laundering and counter-terrorism financing laws. The focus is particularly on firms handling cryptocurrency transactions that have failed to report suspicious activities, with AUSTRAC warning that failure to address these issues could result in the revocation of their registrations.
What Actions Are Being Taken Against Exchanges?
Investigations are currently underway for 13 cryptocurrency exchanges due to non-disclosure of key personnel backgrounds. These exchanges have a 28-day window to rectify their compliance issues, failing which they risk losing their operational licenses.
The regulatory landscape is particularly challenging for cryptocurrency exchanges, which are viewed as high-risk due to their capacity for facilitating large fund transfers. AUSTRAC CEO Brendan Thomas expressed concerns that the cryptocurrency sector could expedite illicit financial activities, prompting regulators to enhance their oversight.
Are Smaller Platforms at a Disadvantage?
Yes, the growing compliance requirements are especially burdensome for smaller and medium-sized platforms. Coinbase Australia CEO John O’Loghlen emphasized that registration does not equate to effective internal controls, urging regulators to differentiate between legitimate and illicit operators.
The heightened scrutiny extends to international money transfer companies, such as Currencyfair, which are now facing stricter regulations. While these audits aim to create a secure financial environment, they also impose significant operational challenges on market players, particularly impacting the viability of smaller businesses.
- Over 50 institutions warned for non-compliance.
- 13 exchanges under investigation for key personnel transparency.
- Compliance costs increasing pressure on smaller platforms.
- AUSTRAC focuses on both cryptos and international money transfers.
The stringent measures by AUSTRAC signify a significant shift towards robust regulatory frameworks for cryptocurrency operations, aiming to fortify the integrity of Australia’s financial ecosystem while posing challenges for existing players in the market.
