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Australia’s financial watchdog has raised concerns over the growing use of digital currencies in facilitating illicit transactions. According to the 2024 Money Laundering National Risk Assessment by the Australian Transaction Reports and Analysis Centre (AUSTRAC), there has been a noticeable increase in criminal activities involving cryptocurrency and crypto exchanges. The report identifies crypto as a “high” risk factor, while digital currency exchanges are tagged with a “medium” risk factor.
Interestingly, traditional channels such as cash, real estate, and luxury goods were labeled with a “very high” risk status, with cash being the most frequently used for unlawful activities. This perspective was also shared by Jim Lee, former US Internal Revenue Service Criminal Investigation chief, who stated, “Cash is still king” due to the “transparent” nature of blockchain technology.
Despite AUSTRAC categorizing cryptocurrencies as less risky compared to traditional methods, the report emphasizes the need for crypto exchanges to register with the agency under the AML/CTF Act. AUSTRAC anticipates that the use of digital currencies in illicit activities will pose a high risk over the next three years.
“As the use of digital currency expands for legitimate use, opportunities for criminal use will also increase,” the report highlights.
International Collaboration and Stringent Regulations
The agency calls for international collaboration and stringent regulations to tackle these issues effectively. In the first half of 2024 alone, Australia faced multiple crypto-related crimes. For instance, in June, the YouTube channel for Australia’s 7News was hacked to promote a crypto scam featuring a deep-fake Elon Musk. Before that, security firm Cybertrace issued an alert about a crypto scam involving Australian mining tycoon Andrew “Twiggy.”
Regulatory Measures and Taxation Efforts
The AUSTRAC assessment follows a ban on using cryptocurrencies as a payment method for online gambling in Australia. To tighten its grip on the crypto sector, Australia’s tax office has been targeting crypto investors by seeking their personal information and details from crypto exchanges. Additionally, the Australian Securities and Investments Commission (ASIC) has been pursuing crypto entities that it believes have offered unregistered securities.
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