AUSTRAC launches oversight campaigns as crypto regulatory reforms begin in Australia

Australia’s financial intelligence unit AUSTRAC has launched two targeted supervisory campaigns in the country’s virtual assets sector as landmark anti-money laundering reforms come into effect.

“AUSTRAC is investigating how well crypto companies in Australia are managing money laundering risks, before major new laws come into force,” Brendan Thomas, the regulator’s chief executive, said in a statement. statement.

AUSTRAC is conducting two distinct supervisory campaigns targeting cryptocurrency companies across Australia. The agency is collaborating with 36 over-the-counter crypto-to-cash operators in what it calls a “spikes and rails” campaign, focusing on companies that facilitate conversion between cryptocurrencies and traditional cash.

The second campaign targets 27 local cryptocurrency exchanges, with a focus on assessing their readiness for regulatory reforms and reviewing their governance arrangements. These supervisory efforts are designed to assess how well companies manage money laundering risks under the expanded regulatory framework.

“We will continue to provide advice and guidance to assist companies on how to comply so that they are well equipped to manage their AML/CFT obligations,” Thomas said.

Regulatory reform extends beyond traditional exchanges. Australia has adopted the internationally recognized term “Virtual Asset Service Provider” (VASP), replacing the narrower definition of “cryptocurrency exchange”. The expanded framework now applies AML obligations to custody, brokerage and other virtual asset services beyond traditional cash-to-crypto exchange models.

“This is more than just a name change,” Thomas said, adding that it “reflects how the sector is evolving and ensures our regulatory framework remains relevant.”

The oversight campaigns come as Australia implements major anti-money laundering reforms It came into effect on March 31and expanding oversight beyond traditional exchanges to include Virtual Asset Service Providers (VASPs) – an internationally recognized term that covers custody, brokerage, and other cryptocurrency services.

AUSTRAC, the Australian financial intelligence unit responsible for regulating anti-money laundering and terrorist financing, has replaced the country’s narrower definition of “cryptocurrency exchange” to align with global standards. Additional travel rule requirements for virtual asset transfers will become mandatory on July 1.

Last year the regulatory body defined cryptocurrencies as The highest threat In its efforts to combat financial crimes. At the time, Thomas stated that the sector was undergoing a regulatory shift “from regulation that primarily checks compliance to regulation focused on substantive risks and harms,” monitoring risk and behavior at an “industry and sector level” rather than focusing on individual entities.