Australia’s AUSTRAC warns of crypto’s growing role in illicit activities

Australia’s financial regulator has expressed concern about the increasing use of digital currencies to facilitate illegal transactions.

The country has seen an increase in the criminal use of cryptocurrencies and crypto exchanges, according to the 2024 National Money Laundering Risk Assessment by the Australian Transaction Reports and Analysis Centre (AUSTRAC), a financial intelligence agency. The report described crypto as a “high” risk factor.

Meanwhile, digital currency exchanges were given a “medium” risk factor.

Interestingly, much of the illicit activity was facilitated through traditional channels such as cash, real estate and luxury goods, with cash leading the way, given a “very high” risk status.

Similar sentiments were recently expressed by Jim Lee, former chief of criminal investigations at the U.S. Internal Revenue Service, during an appearance on Yahoo Finance’s Future Focus. According to Lee, “Cash is still king” due to the “transparent” nature of blockchain technology.

While AUSTRAC classifies cryptocurrencies as less risky, the report urged crypto exchanges to register with the agency under the AML/CTF Act. AUSTRAC expects the use of digital currencies in illicit activities to pose a high risk for the “next three years.”

“As the use of digital money for legitimate purposes becomes more widespread, opportunities for criminal use will also increase,” the report said.

The agency also called for international cooperation and strict regulations to effectively combat these problems.

Australia has seen multiple crypto crimes in the first half of 2024 alone. In June, Australia’s 7News channel’s YouTube channel was hacked to promote a crypto scam featuring a deepfake Elon Musk. Prior to that, security firm Cybertrace issued a warning about a crypto scam involving Australian mining tycoon and entrepreneur Andrew “Twiggy.”

The AUSTRAC assessment comes after the use of cryptocurrencies as a payment method for online gambling was banned in Australia.

In a bid to tighten its grip on the crypto sector, the Australian tax office is also targeting crypto innovators who ask for personal information and details from crypto exchanges, while the Australian Securities and Investments Commission (ASIC) is also going after crypto assets it believes are offering unregistered securities.