AUSTRAC Launches Supervision Campaign as Australia Tightens Crypto AML Rules

Highlights:

• AUSTRAC launches supervision campaigns covering OTC crypto operators and local exchanges.
• Australia’s VASP reforms now cover custody, brokerage, and other virtual asset services.
• New rules move crypto oversight closer to financial services licensing and AML checks.

Crypto firms in Australia now fall under fresh review as the financial intelligence unit (AUSTRAC) widens its anti-money laundering (AML) rulebook. According to a statement on May 8, the agency launched supervision campaigns targeting over-the-counter operators and local exchanges. The campaigns examine business models, governance standards, and controls for money-laundering risks.

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Australia is shifting from the older digital currency exchange model. It now uses the broader virtual asset service provider framework. Therefore, firms involved in custody, brokerage, and other crypto services now face wider compliance duties. AUSTRAC noted that the change reflects the market’s growth beyond simple cash-to-crypto transactions.

AUSTRAC Launches Supervision for Local Crypto Operators

The first campaign focuses on 36 over-the-counter crypto businesses that handle crypto-to-cash services. These firms often act as ramps between digital assets and traditional money. As a result, AUSTRAC wants a closer look at their channels, scale, customer checks, and transaction monitoring systems.

The agency said in the statement that the move is part of its “ramps and rails” campaign. It focuses on points where consumers move funds into or out of the crypto markets. These areas can pose money laundering risks if adequate controls or clear records are not in place.

We’re conducting 2 supervisory campaigns aimed at Australia’s virtual assets sector.

We’re engaging with dozens of crypto businesses and exchanges to focus on how they’re managing their AML/CTF risks & prepare them for upcoming reforms.

Read more: https://t.co/vJ2Gu9NldV pic.twitter.com/JtcchHdLv9

— AUSTRAC (@AUSTRAC) May 8, 2026

Meanwhile, AUSTRAC is also engaging in a second campaign covering 27 local crypto exchanges. This review focuses on reform readiness and governance arrangements. It also checks whether exchanges have prepared for wider reporting and compliance requirements.

Australia Moves From DCE Rules to VASP Oversight

The term “Virtual Asset Service Provider” has been adopted by Australia as an alternative to the narrower “Digital Currency Exchange.” The change provides a wide view of the crypto activities for regulators. Moreover, it aligns the local framework with the international language used for virtual asset businesses.

The new approach extends beyond basic exchange services. It covers any custody, brokerage, and other virtual asset products that support trading or transfer activity. Therefore, businesses that previously were not included in the older definition would require robust AML/CTF systems.

AUSTRAC chief executive Brendan Thomas said the agency would like crypto companies to manage the risk of money laundering before new laws come into effect. He further added that the agency will continue to offer advice and guidance. The approach provides businesses with a clearer route to meet their obligations.

The reforms also bring timing pressure. Some newly regulated virtual asset services are subject to a “transitional period” before the obligations take effect. As a result, firms must prepare early if they want smooth compliance when deadlines arrive.

Digital Asset Rules Move into Financial Services

The supervision drive also comes amid Australia’s broader digital asset framework. Last month, Parliament passed the Corporations Amendment (Digital Assets Framework) Bill, which targets exchanges and custody platforms. Under the bill, those firms would need an Australian Financial Services License from ASIC.

🚨BREAKING: AUSTRALIA HAS OFFICIALLY ENTERED THE CRYPTO REGULATION ERA

Australia has passed its first crypto law, requiring all exchanges and custody providers to hold a financial services licence.

The parliament passed the Digital Assets Framework Bill on April 1, ending years… pic.twitter.com/JnAMd9PI9u

— BSCN (@BSCNews) April 1, 2026

The proposed framework grants ASIC stronger powers over custody, disclosure, settlement, and platform conduct. Smaller firms have been granted exemptions under the plan. The full structure is anticipated to roll out gradually so that businesses have the opportunity to adapt.

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