AUSTRAC Targets 63 Crypto Operators in Dual AML Supervision Campaigns

*TL;DR AUSTRAC is auditing 36 over‑the‑counter crypto‑cash providers and 27 domestic exchanges to test AML compliance before new anti‑money‑laundering laws take effect.*

Context Australia’s financial intelligence unit, AUSTRAC, has rolled out two focused supervisory campaigns. The moves coincide with reforms that broaden anti‑money‑laundering (AML) obligations from traditional exchanges to all virtual asset service providers (VASPs), including custodians and brokers. The reforms, effective March 31, also introduce a Travel Rule for crypto transfers on July 1.

Key Facts - The “ramps and rails” campaign engages 36 over‑the‑counter (OTC) operators that convert crypto to cash. These services sit outside regulated exchanges and have been a blind spot for AML monitoring. - A second campaign examines 27 Australian crypto exchanges, checking governance, transaction monitoring and readiness for the expanded AML framework. - AUSTRAC chief Brendan Thomas said the regulator is assessing how well firms manage money‑laundering risks ahead of the new laws. - Bitcoin (BTC) closed at $28,400, up 2.1% on the day, while Ethereum (ETH) rose 1.8% to $1,820, reflecting market optimism after the regulatory announcement. - The total market cap of Australian‑listed crypto‑related stocks, led by BTCX.AX (Bitcoin ETF) at $1.2 billion, slipped 0.4% as investors weighed compliance costs.

What It Means AUSTRAC’s dual campaigns signal a shift from entity‑by‑entity checks to sector‑wide risk assessment. By targeting both OTC cash‑out points and exchange platforms, the regulator aims to close loopholes that criminals could exploit. Firms that demonstrate robust AML controls may receive guidance rather than penalties, while laggards could face enforcement actions once the reforms are fully enforced.

The broader AML overhaul aligns Australia with the Financial Action Task Force’s VASP standards, potentially raising the cost of compliance for smaller operators. Market participants should watch for AUSTRAC’s guidance notes, expected in the coming weeks, and for any early enforcement notices that could affect liquidity on domestic platforms.

Looking ahead, the next indicator will be the first set of compliance reports due by September, which will reveal how many of the 63 entities meet the new AML thresholds and whether the Travel Rule triggers any cross‑border reporting challenges.