Australia’s AUSTRAC Warns of Crypto’s Growing Role in Illicit Activities

Australia’s AUSTRAC Warns of Crypto’s Growing Role in Illicit Activities

The Australian financial regulator had recently raised both eyebrows that more and more cryptocurrency transactions take place in an illegal manner.

Rising Concerns Over Cryptocurrency Use

It is stated in the 2024 Money Laundering National Risk Assessment by the Australian Transaction Reports and Analysis Centre (AUSTRAC) that there is a wave of cybercrime occurring in the country with the increase in criminal use of cryptocurrency and of crypto exchanges. It was written almost in contrast as the report labelled crypto as a ‘high’ risk while digital currency exchanges were assigned a ‘medium’ risk factor.

Traditional Channels Still Leading

Surprisingly, most criminal actions were the product of illegal activities that were still primarily facilitated via traditional channels such as cash, real estate, and luxury goods, that have been exclusively classified as “very high” risk status for cash. Jim Lee, former US Internal Revenue Service Criminal Investigation chief, pointed out in his talk on Yahoo Finance Future Focus stating, “Cash is still king” as “blockchain technology” cannot hide the cash transactions.

Call for Stricter Regulations

On one hand, AUSTRAC named digital currencies as being not very risky, but still, the report called for crypto exchanges to follow the rules and to make them register under the AML/CTF Act. AUSTRAC expects that the use of digital currencies for illicit activities will be a problem in the “next three years.” The report claimed that “As the use of digital currency expands for legitimate use, opportunities for criminal use will also increase.” Also, the agency required international cooperation and the enforcement of strict rules to solve these problems.

Recent Crypto Crimes in Australia

Australia had a number of crypto scams in the first half of 2024. In June, the YouTube channel of Australia’s 7News was controlled so as to let a deep-fake Elon Musk present a fake crypto. Ever since, the security company, Cybertrace, has been working to stop the warned of Andrew “Twiggy” the crypto scam in Australia.

Regulatory Actions

The AUSTRAC findings come on the heels of the ban on cryptocurrencies as a mode of gambling payment in Australia. Moreover, to further regulate the crypto industry, Australia’s tax office is also demanding personal data of crypto investors. Also, the Australian Securities and Investments Commission (ASIC) has been pursuing unregistered security charges against the cryptocurrency companies it feels have been unregistered.

Future Implications

The AUSTRAC’S alerts on the growing digital currency misappropriation highlight the importance of strengthened vigilance and effective precautions to counteract such misuse. Along with the sophisticated financial transaction ecosystem, strategies to minimize related risks should also be advanced. Concomitant with stricter regulations, the need for global cooperation is indispensable in dealing with the rising issues concerning the illegal misuse of cryptocurrencies.