AUSTRAC in crypto clamp down, nixing Bitcoin ATM | Australian Markets

Financial intelligence and illicit actions investigator AUSTRAC has introduced a additional crackdown on Australia’s cryptocurrency sector after observing “worrying trends in crypto ATM compliance”.

AUSTRAC revealed it has refused to resume the operator registration of South Australia-based crypto ATM operator Harro’s Empires, in addition to inserting working situations, together with transaction limits, on others.

The new situations have been imposed after an AUSTRAC taskforce recognized, it says, “customer activity that bears the hallmarks of scams, fraud, and other illicit activity”.

Among the new situations embrace a $5,000 restrict on money deposits and withdrawals, enhanced buyer due diligence obligations, obligatory rip-off warnings, and necessities for more strong transaction monitoring, famous AUSTRAC chief govt Brendan Thomas.

“The conditions are designed to help protect individuals from scams by deterring criminals from directing them to a crypto ATM, as well as to protect businesses from criminal exploitation,” Thomas mentioned.

“In light of the risks and harms we consider it is absolutely necessary to ensure the sector meets minimum standards and reduces the criminal misuse of crypto ATMs.”

While the money restrict applies solely to crypto ATM suppliers, the regulator has referred to as for different digital currency exchange suppliers that settle for money to impose comparable limits.

“This will reduce their exposure to money laundering, terrorism financing and other serious crime risks,” Thomas mentioned.

Harro’s Empires, which operates 4 Bitcoin ATMs throughout the Greater Adelaide space, was blocked by AUSTRAC after it was discovered to be “exhibiting ongoing risks that its [crypto ATMs] could be exploited”.

“This action draws a clear line in the sand and serves as a warning to other digital currency exchange providers that aren’t meeting their responsibilities under the AML/CTF Act,” Thomas mentioned.

The presence of crypto ATMs in Australia has exploded in current years – from simply 23 ATMs in 2019 to more than 1,800 machines in operation at present, AUSTRAC estimates. Over the final two years alone, the regulator has noticed a 15-fold increase in crypto ATMs throughout Australia.

These machines allow people to transform money or debit card funds into cryptocurrencies, together with widespread cash Bitcoin, Ethereum, and Tether.

Australia can also be home to more than 400 digital currency exchange suppliers (against this, Britain has simply 40), with solely round 40 companies concerned in crypto holding an ASIC licence.

AUSTRAC has projected that just about 150,000 transactions happen yearly, with about $275 million being moved utilizing crypto ATMs.

Around 99% of these transactions are money deposits for the acquisition of cryptocurrencies.

Curiously, the 60 to 70 age group have been recognized as one of probably the most prolific customers of crypto ATMs in Australia – many of whom are victims of scammers and felony money laundering operations.

A earlier report discovered that many victims in this age group have been being exploited as “money mules”, used to transform money raised by organised criminals into typically untraceable cryptocurrencies that may then be ferried out of Australia, past the jurisdiction of regulators.

“It is a huge concern that people in this demographic are over-represented as customers using cash to purchase cryptocurrency and, as evidence suggests, that a large number of 60- to 70-year-old users are victims of scam activity,” Thomas mentioned.

According to AUSTRAC’s Cryptocurrency Taskforce, which collected information from 9 crypto ATM suppliers, revealed that almost all of crypto ATM customers are over 50 years of age. What is more, they accounted for more than two-thirds (72%) of all transactions by worth, with 60- to 70-year-olds alone accounting for 29% of all transactions by worth.