The AML/CFT Act (Anti-Money Laundering and Counter-Terrorism Financing Act 2006) plays a vital role in shaping crypto regulation in Australia by ensuring that cryptocurrency businesses operate in a secure and transparent manner. This legislation is designed to reduce the risk of digital assets being misused for illegal activities such as money laundering or terrorism financing. Under the Act, cryptocurrency service providers, including digital currency exchanges, are required to meet strict compliance standards before offering their services to customers.

A key requirement is Customer Due Diligence (CDD), which involves verifying a customer’s identity and continuously monitoring transactions to detect unusual or suspicious behaviour. Crypto businesses must also develop internal AML/CFT programs that outline how risks are identified and managed. When suspicious transactions or large cash movements occur, these must be reported to AUSTRAC, the government authority responsible for overseeing and enforcing compliance with the Act.

In addition, companies are required to keep accurate records of customer information and transactions for a minimum of seven years. By enforcing these obligations, the AML/CFT Act strengthens crypto regulation in Australia, builds trust in the cryptocurrency industry, supports international compliance standards, and protects the integrity of Australia’s financial system.

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Guide to Crypto Regulation in Australia