AUSTRAC hits crypto ATM firm with fine for AML/CTF failures

Cryptocurrency ATM provider, Cryptolink, has been hit with a $56,340 infringement notice from AUSTRAC related to “deficiencies” in its anti-money laundering and counter-terrorism financing (AML/CTF) risk assessment framework.

AUSTRAC also confirmed it had accepted a court-enforceable undertaking from Cryptolink in relation to its AML/CTF failures, following an investigation conducted by the regulator’s Crypto Taskforce that found the company had reported large cash transactions late.

As part of the enforceable undertaking, Cryptolink is required to engage a third part to:

• validate whether the business has reported all required threshold transactions to AUSTRAC;

• assess whether the business has implemented effective controls for large cash transactions; and

• review Cryptolink’s money laundering and terrorism financing risk assessment to ensure it is fit-for-purpose.

“The infringement notice addresses previous non-compliance around reporting and the enforceable undertaking seeks assurance that Cryptolink has improved its risk assessments and strengthened its AML/CTF controls,” AUSTRAC CEO, Brendan Thomas, said.

“Crypto ATMs are one of the highest risk money laundering channels in Australia at the moment. They are being exploited by criminals to launder money and move scam proceeds.

“This is not conjecture. It’s what our Crypto Taskforce observed and has been backed up by the work of our law enforcement partners.”

The action taken against Cryptolink comes as crypto ATMs have fallen under intense scrutiny by AUSTRAC, after research from the taskforce suggested that 85 per cent of transactions made by 90 of the top crypto ATM users were with the proceeds of scams and money mule activty.

“Scams are one of the biggest drivers of suspicious activity and criminals have been using crypto ATMs to move and cash out stolen funds,” Thomas said.

“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.

“Criminals don’t care how they hurt people, they care about making money. We want to work with the digital currency exchanges to harden the sector against exploitation but if operators don’t take this seriously, we will take action.”

AUSTRAC confirmed Cryptolink had paid the infringement notice in full.