Technology has paved the path to success for businesses. Thanks to the internet, financial transactions have become ten times easier as they occur within seconds. Despite this, many fraudsters launder money regularly by hacking the firewalls. Some thieves hack into bank accounts and steal their hard-earned money. Due to the rise in fame of the crypto space, financial security concerns are rising daily. That is why the government of Australia has made it mandatory for crypto and remittance service providers to have AUSTRAC registration (Australian Transaction Reports and Analysis Centre) with compliance to AML laws (Anti Money Laundering).
At least one in a group of 5 individuals in Australia are investing in cryptocurrency every day. A survey in Brisbane, Sydney and Melbourne showed that 90% of the population has invested in some form of crypto. It displays a clear picture of how the crypto space has influenced over 50% of the younger demographic of Australia. This is one of the significant causes crypto services comply with AML and register themselves accordingly.
Sectors of finance that require to comply with AML/CFT:
Apart from financial institutions, various other organisations sectors must also comply with anti-laundering:
● Cryptocurrency services
● Currency exchange
● Real estate sectors
● Insurance companies
● Remittance services
● Banking industry
● Gambling (Casino and game) industry
Top reasons for remittance and crypto businesses to comply with AML:
● Risk of reputation: For brands to stay long-standing in the industry, they must have a positive reputation amongst their fellow financial institutions and the public. Crypto and remittance services must comply with AML and complete AUSTRAC registration to ensure they do not harm their hard-earned reputation. Implementing these regulations against money laundering will ensure safer transactions on their platform. Besides, brand awareness will also increase, encouraging people to use their platform. The service provider should also pay their cryptocurrency taxes on time.
● Protection against evolving threats: Thieves find a way to steal anything, from finances to identities. No matter how robust the security and firewall systems are, they always find a way to hack the system. It is straightforward for them to transact as large as 3 trillion dollars within seconds. If cryptocurrency services are smart enough to safeguard theirs and their consumer’s assets, they will ensure to get the AUSTRAC registration done in compliance with AML. This simplifies the criminal identification process who pose themselves to be merchants and vendors by reporting them to the cyber-crime department of Australia.
● Inflation and avoiding fines: The process of safeguarding financial assets with activities related to AML is expensive. Operating this significantly involves many manual efforts, making it complicated. The risk of money laundering is only rising as the years pass, not to forget the inflation of prices worldwide. It is best to get the AUSTRAC registration and AML or CFT (Combating the financing of terrorism) as soon as possible. If the registration process is not done on time, the service provider can get penalised with a hefty fine. It is better to register before a deadline by being proactive instead of going through all that hassle.
● Risking client/customer experience: If industries like casinos, gaming and cryptocurrency are not registered under the Australian government for anti-laundering, people will not trust the services. The potential customers will not want to risk their hard-earned money falling into the wrong hands. It is not worth risking the customer experience on the platform by allowing it to be unsafe.