AUSTRAC Penalizes Cryptolink for AML/CTF Failings

The Australian Transaction Reports and Analysis Centre (AUSTRAC) announced that it has penalized crypto payments firm Cryptolink over certain anti-money laundering and counter-terrorist financing shortcomings. In addition to that, Cryptolink was required to onboard a third-party auditor to ensure its compliance.

The Penalty Seeks Assurance That Cryptolink Will Raise Its Standards

In its official announcement, the AUSTRAC confirmed the issue of an infringement notice of AUD 56,340 ($36,832) to Cryptolink. This intervention comes in the wake of the discovery of AML and CTF failings.

According to the AUSTRAC, its Crypto Taskforce identified late reporting of sizeable cash transactions and weaknesses in Cryptolink’s AML and CTF assessments. These deficiencies were discovered as part of a broader crackdown on the crypto payments sector.

Brendan Thomas, CEO of AUSTRAC, highlighted the inherent risks tied to cryptocurrencies, emphasizing that crypto ATMs are “of the highest risk money laundering channels” in the country currently. He added that criminals are often using such ATMs to launder illicit proceeds, as proven by the observations of the Crypto Taskforce and its law enforcement partners.

Thomas noted that the Cryptolink penalty seeks assurance that the company has improved its risk assessments and reinforced its AML/CTF controls.

Cryptolink Has Remained Fully Cooperative

In addition to being required to pay AUD 56,340 due to its reported failings, Cryptolink was also asked to onboard the services of a third-party auditor. The latter will be tasked with validating whether the firm has reported all required threshold transactions to the AUSTRAC, assessing whether it has improved its controls for larger transactions, and reviewing its AML/CTF policies and protocols.

The AUSTRAC emphasized that the crypto ATM business has fully cooperated and paid the infringement notice in full.

The Crypto Sector Is Vulnerable to Fraud, Thomas Says

As mentioned, the penalty was part of a broader crackdown on the crypto sector following the discovery that some 85% of the transactions made by the 90 most prolific crypto users were the proceeds of scams and money mule activities.

To make matters worse, a recent study of the Australian Institute of Criminology suggested that some 40% of the victims of cybercrime are revictimized, sometimes within months.

With this in mind, we want people to be cautious of making transactions to any wallet they don’t control and thinking twice in circumstances where someone asks you to deposit money into a crypto ATM.

Brendan Thomas, CEO, AUSTRAC

Thomas added that criminals feel no remorse in hurting others, so long as it is profitable. Because of that, he vowed to continue leading AUSTRAC’s fight against crypto scams.