Attempts to prevent money-laundering could result in the introduction of legislation in Australia which may require providers of cryptocurrency to share information about their customers and their transactions with AUSTRAC.
According to a report by the Australian Financial Review, the Chief Executive Officer of AUSTRAC, Nicole Rose, advised the Senate in late May 2021 that regulators were considering the imposition of a ‘travel rule’, amongst other changes designed to consider potential issues arising from the increased use of digital currencies.
Greater visibility of identity and location of crypto payments
In response to questioning from Labor Senator Raff Ciccone, Ms Rose stated that a travel rule would permit AUSTRAC to have greater “visibility” about the identities of both the payer and payee in a cryptocurrency exchange. By the “development of intelligence”, Ms Rose hopes that ransomware operators and other cyber criminals could more easily be identified by AUSTRAC and prosecuted.
This comes on the back of estimates from security firm Emsisoft, which concluded that the Australian economy had lost some $1.4 billion in 2020 due to ransomware attacks. Ransomware attacks involve a cybercriminal hacking into a computer system (generally that of a business) and either threatening to release sensitive and private information or completely disable the function of computing systems until a nominated ransom is paid. The estimated $1.4 billion in losses includes both the costs of paying ransom demands and the associated ‘downtime’ while businesses are non-operational in response to the threat.
In response to questioning from Mr Ciccone, Ms Rose reportedly acknowledged that the imposition of a travel rule would have greater benefits not just in dealing with ransomware attacks, but would generally result in AUSTRAC having greater oversight of both the place of origin and ultimate destination of cryptocurrency payments.
Global push for travel rule
There is currently a global push for countries to comply with the Financial Action Task Force’s recommendations for regulating crypto and combatting financial crime, including implementing the travel rule.