Australia Cracks Down on Crypto Firms Over Compliance Failures

Highlights:

• AUSTRAC is taking action against crypto providers who do not follow AML laws and has penalized 13 firms.
• Several executives are facing legal action, while two major exchanges were removed from the register after filing for bankruptcy.
• AUSTRAC plans to impose strict rules for crypto businesses in 2025.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) ordered cryptocurrency exchanges and remittance providers to adhere to anti-money laundering legislation. According to the agency, failure to comply with regulations will result in serious penalties. AUSTRAC is performing an evaluation of more than 50 providers while having already punished 13 of them.

AUSTRALIA’S REGULATOR JUST SHOOK UP CRYPTO

AUSTRAC just hit 13 remittance & crypto providers, shut down six, and put 50+ more on notice for weak compliance.

Two collapsed exchanges – FTX Express & Zipmex – were wiped from the registry.

Regulation isn’t new, but this is a… pic.twitter.com/vi1tiquHo4

— Crypto Town Hall (@Crypto_TownHall) February 17, 2025

AUSTRAC CEO Brendan Thomas revealed in his statement that nine providers lost their registration last year. AUSTRAC revoked or suspended operating licenses from nine financial service providers because they did not meet requirements in the Anti-Money Laundering and Counter-Terrorism Financing Act. Two other providers received restrictions on their registrations. AUSTRAC warned that their registrations may be suspended or canceled if they fail to comply with the imposed conditions.

The agency has been investigating compliance failures for over a year. AUSTRAC has imposed restrictions on two providers and emphasized that further violations could result in termination. The agency believes several organizations have failed to fulfill their reporting obligations by not disclosing suspicious transaction information or by underreporting these activities. AUSTRAC considers incomplete disclosure and underreporting of suspicious transactions by financial institutions as factors that drive financial crimes.

Compliance Failures and Legal Actions Against Industry Players

Several executives are already facing legal action after not complying with requirements. Executives affiliated with Auaisa Trading Pty Ltd, Amco Travelling and Exchange Pty Ltd, and B-Paywize Pty Ltd are either facing charges or legal actions.

The Digital Currency Exchange Register recently removed FTX Express and Zipmex Australia after they filed for bankruptcy. AUSTRAC reported that poor reporting of suspicious transactions by cryptocurrency exchanges reduces the effectiveness of financial crime investigations.

The regulator tracks the operations of 417 registered cryptocurrency exchanges. AUSTRAC uses a crypto task force to monitor if the exchanges comply with AML laws. The agency remains dedicated to ensuring financial sector transparency while upholding security measures.

Regulatory Focus on the Crypto Industry Intensifies

AUSTRAC has intensified its attention on the cryptocurrency industry. The regulator announced plans to intensify monitoring of cryptocurrency exchanges and remittance providers in 2025. Crypto ATM operators remain a top focus for the agency because they suspect that most of them are used for money laundering.

Australia hosts 1,453 Bitcoin and cryptocurrency ATMs. The country ranks as the third largest holder of ATMs in the world. The sector has grown from 67 crypto ATMs back in 2022. The growing number of crypto businesses has created uncertainty around potential risks for financial crime and money laundering.

Most #Bitcoin ATMs are in a few countries. The U.S. has over 29,000, while Canada and Australia follow with a few thousand each.
Spain, Poland, and #ElSalvador are next, but with significantly lower numbers. pic.twitter.com/tkWKrp1h2L

— Farhat HN 🇩🇪 (@farhat_hn) February 7, 2025

AUSTRAC presented new anti-money laundering and counter-terrorism financing rules to the public in December. The proposed regulations seek to enhance transparency and industry compliance standards. Similarly, the Australian Securities and Investment Commission published their consultation paper in the same month. The document proposes that many digital assets should be classified as financial products. Under the proposed regulation, crypto companies would need to get licenses to operate.