Australia has proposed stricter regulations targeting the cryptocurrency sector in an effort to combat financial crime.

Proposed Regulations

The proposed rules aim to address existing gaps, enhance oversight of high-risk sectors, and enforce more rigorous compliance measures for businesses operating within the cryptocurrency landscape.

The regulations will require businesses to:

• Verify customer identities
• Monitor suspicious transactions
• Maintain transparency in cross-border asset transfers

Expanded Regulatory Oversight

The proposed reforms introduce expanded regulatory oversight for high-risk sectors, including:

• Cryptocurrency exchanges
• Legal services
• Real estate businesses

Enhanced Definitions and Obligations

The updated regulations will also:

• Enhance the definitions of reporting groups
• Impose stricter obligations under the Travel Rule for international transfers

Compliance Measures

The proposed framework seeks to reduce compliance burdens by adopting an outcomes-based compliance model, allowing organizations to tailor their compliance measures according to their size, structure, and risk profile.

The introduction of the AML/CTF General Rule 2025 and the AML/CTF (Exemptions) Rule 2007 is a key component of this proposal.

Public Consultation

AUSTRAC is actively seeking input from stakeholders during the public consultation period to refine the proposed regulations.

Implications for the Cryptocurrency Industry

This initiative is part of a broader trend of increasing regulatory scrutiny on the cryptocurrency industry in Australia.

The implications for the cryptocurrency industry are profound, as the emphasis on enhanced oversight, customer due diligence, and compliance flexibility signals a shift towards a more regulated landscape.

Stakeholders will need to adapt to these changes while navigating the evolving regulatory environment.