Australia Proposes New Crypto Regulations Targeting Exchanges, Real Estate, Legal Services

Australia has introduced a new set of rules that it hopes will help put up a better fight against financial crimes that have long terrorized the crypto sector.

Australia is proposing stricter crypto rules to combat financial crime

Australia has proposed new rules to strengthen its fight against financial crimes, particularly those involving cryptocurrencies. The proposals were put forward by the Australian Transaction Reports and Analysis Centre (AUSTRAC) as part of broader efforts to update the country's Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) Act.

The AML/CTF Act was amended and passed by Parliament in November, and AUSTRAC's draft rules aim to introduce stricter compliance measures for businesses operating in high-risk sectors, such as crypto exchanges, real estate, legal services and other businesses that may easily evade proper checks and oversight.

According to AUSTRAC, it is currently seeking public consultation on the new framework, with feedback to be accepted until February 2025.

Key Changes in Proposal

Australia is proposing changes like stricter customer due diligence (CDD) requirements, which will mandate businesses to verify customer identities using risk-based processes. Companies will also be required to monitor transactions for suspicious activity and maintain greater transparency in cross-border transfers of assets.

Under these new rules, reporting obligations also take up a new shape. Now, businesses must ensure that they keep detailed records of their operations.

There is also an outcomes-based compliance model that this new framework proposes. This means that businesses are subjected to varying degrees of compliance as their size, structure, and risk profiles dictate. By doing this, regulatory standards are kept at their highest without necessarily burdening some firms more than others.

Finally, the proposal also includes updates to existing rules, such as the AML/CTF General Rule 2025 and the AML/CTF (Exemptions) Rule 2007. The goal of this is to retain as much as possible relevant exemptions and throw out those requirements that may not apply in today’s world.

Growing Concerns Over the Illicit Use of Crypto in Australia

It might be worth noting that AUSTRAC's move to tighten regulations did not just come out of the blue. Now more than ever, Australia has identified an urgent need to address the misuse of cryptocurrency within its borders. Hence, the decision by AUSTRAC to step up its efforts in that regard.

On December 6, AUSTRAC announced the creation of a task force to oversee crypto ATM providers. These machines, often targeted by criminals for their shady businesses, are now under intensified scrutiny. The task force has now been saddled with the responsibility of ensuring that these providers meet minimum compliance standards.

Generally, Australia is keen on strengthening its financial regulatory framework, which can not be done without addressing the loopholes in the crypto sector. As a result, the government is now urging stakeholders, including financial institutions and crypto firms, to provide valuable input during this consultation period to help shape the final regulations.

Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.

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