Australia's Anti-Money Laundering Regulator Cracks Down on Crypto Exchanges and Remittance Services

Australia's Anti-Money Laundering regulator, AUSTRAC, has launched a significant crackdown on the cryptocurrency and remittance sectors, with 13 service providers facing regulatory action and over 50 others under investigation for potential compliance failures.

In a statement released on February 17, AUSTRAC CEO Brendan Thomas revealed that six remittance and crypto exchange providers had been denied registration renewal due to serious issues involving key personnel. These individuals had either been convicted, prosecuted, or charged with offenses that raised concerns about their integrity. AUSTRAC’s move reflects ongoing efforts to hold businesses accountable in Australia’s growing digital finance space.

A Wide-Scale Compliance Push

Alongside the six providers whose registration renewals were rejected, AUSTRAC issued alerts to more than 50 other remittance and crypto firms. These alerts serve as a warning that regulatory action could follow if the companies fail to comply with mandatory reporting requirements, particularly around suspicious transactions and financial activities. AUSTRAC’s investigation found systemic issues of non-reporting and under-reporting within the remittance and digital currency exchange industries.

Thomas explained that the investigation, which began early in the previous year, is part of AUSTRAC's broader initiative to ensure greater transparency and compliance within the industry. “Our aim is to identify non-compliant providers and improve the industry's reporting on suspicious matters,” he said.

Regulatory Pressure Intensifies

In addition to the denied renewals, two providers were issued conditional registration, meaning they must meet specific requirements within a designated timeframe. Failure to comply could result in suspension or cancellation of their registration. AUSTRAC also noted that three firms, whose registration was refused, have since ceased operations in Australia.

As part of the crackdown, two major crypto exchanges — FTX Express, a subsidiary of the now-collapsed FTX, and Zipmex Australia — were removed from the country’s Digital Currency Exchange Register following their insolvencies.

Growing Concerns Over Crypto Industry Compliance

AUSTRAC’s regulatory blitz comes as the cryptocurrency industry in Australia faces increasing scrutiny. There are currently 417 digital currency exchanges and 5,112 remittance providers registered with AUSTRAC, underscoring the sector’s rapid growth. However, the agency is particularly focused on the crypto sector, which has seen significant expansion in recent years.

Australia is now the third-largest hub for Bitcoin and cryptocurrency ATMs, with over 1,450 ATMs operating nationwide, a dramatic increase from just 67 in August 2022, according to Coin ATM Radar. In light of this growth, AUSTRAC announced last December that its attention would shift towards crypto businesses in 2025, especially targeting those who may be violating Anti-Money Laundering (AML) regulations, such as crypto ATM providers.

Strengthened AML/CTF Oversight

To address these concerns, AUSTRAC proposed stricter Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) rules in December 2023. The new regulations aim to bolster oversight of the crypto industry and mitigate the risks of financial crime. Additionally, the Australian Securities and Investments Commission (ASIC) released a consultation paper in December, suggesting that many digital assets may fall under the category of financial products. If this guidance is adopted, businesses involved in cryptocurrency transactions may be required to obtain appropriate licenses, increasing regulatory control over the industry.

With regulatory bodies stepping up their oversight, the Australian government’s intensified focus on the crypto and remittance sectors is a clear indication that non-compliance will no longer be tolerated. These actions are a crucial part of the broader global push to prevent money laundering, terrorist financing, and other illicit activities in the digital finance space.

As the investigation continues, industry players are being urged to ensure their operations meet the necessary compliance standards or risk facing severe consequences.