The Transformation of Australia’s AML/CTF Framework
Australia stands at the threshold of what experts are calling the most significant overhaul of its anti-money laundering and counter-terrorism financing (AML/CTF) framework in decades. This sweeping reform, championed by AUSTRAC CEO Brendan Thomas, represents a fundamental shift in how the country approaches financial crime prevention. The changes will dramatically expand regulatory oversight from approximately 18,000 businesses to around 100,000 entities.
The reform comes at a critical time, as serious and organized crime costs Australia an estimated AU$68 billion ($42.2 billion) annually. This staggering figure underscores the urgent need for a more robust approach to combating financial crime. The Australian government has recognized that without major reforms, the AML/CTF regime would become increasingly ineffective against sophisticated criminal networks.
“This is a momentous time for AML/CTF regulation,” Thomas emphasized during the ACAMS Conference at The Assembly Australasia 2025.
We’re about to embark on the most ambitious overhaul of Australia’s anti-money laundering laws in a generation… These reforms will enable us to be more effective in the fight against financial crime and the harm it causes Australia.
Tranche 2 Entities: Closing the Regulatory Gap
At the heart of this reform is the inclusion of so-called ‘tranche 2’ entities—real estate professionals, lawyers, accountants, dealers in precious stones and metals, and trust and company service providers. These sectors have long been recognized both domestically and globally as high-risk for criminal exploitation.
The implementation timeline for these reforms is carefully staged:
- August 2025: Finalization of AML/CTF Rules
- March 31, 2026: Changes in obligations for Tranche 1 reporting entities and virtual assets service providers
- July 1, 2026: AML/CTF obligations apply to Tranche 2 entities
- Throughout 2026: Ongoing enhancements to sector-specific guidance
This phased approach allows businesses time to adapt to the new regulatory landscape. The reforms encourage a risk-based approach for know your customer (KYC) and compliance, where risk policies are tailored to an organization’s risk appetite. This strategic focus on higher-risk areas can streamline compliance processes while enabling more proactive identification and mitigation of potential financial crimes.
From Compliance to Outcomes: AUSTRAC’s Evolving Strategy
AUSTRAC is fundamentally shifting its regulatory approach from simply checking compliance boxes to focusing on outcomes and addressing the harms resulting from inadequate money laundering risk management. “We are shifting our regulatory approach from just looking at compliance to focus on outcomes and… the harms resulting from businesses failing to manage money laundering risks,” Thomas stated.
This outcomes-focused approach means AUSTRAC will now prioritize risks that span entire industries, with intervention strategies tailored for sector-specific threats. The agency is increasingly targeting transnational crime, which has become more complex and global in nature.
“We’re not just dealing with crime networks anymore—we’re facing distinct money laundering organisations that compete for contracts, probe our defences, and exploit any regulatory gaps they can find,” Thomas explained. These organizations operate as sophisticated businesses with compartmentalized roles, trusted intermediaries, and adaptive strategies, increasingly investing in AI and large data analysis.
Cryptocurrency: A Key Battleground
One of the most visible examples of AUSTRAC’s new strategy is its cryptocurrency Taskforce. Established to oversee the rapidly growing number of crypto ATMs—which exploded from just 23 in 2019 to over 1,800 in 2025—the Taskforce has uncovered alarming patterns of illicit activity.
Their investigations revealed that up to one in ten crypto ATM transactions may be linked to criminal activity, with victims often being individuals over the age of 60. In response, AUSTRAC has implemented stricter controls, including a AU$5,000 ($3,100) cash deposit limit and enhanced due diligence requirements.
Australia currently has approximately 400 AUSTRAC-registered digital currency exchange providers, though only a small number operate crypto ATMs. With 1,200 operating crypto ATMs, Australia has the third-highest number globally. All these operators must meet minimum standards and implement robust practices to tackle scams conducted through their machines.
“Cryptocurrency and crypto ATMs are attractive avenues for criminals looking to launder money, as they are widely accessible and facilitate near-instant and irreversible transfers,” Thomas noted. “We’re seeing too many Australians falling victim to scams carried out through cryptocurrency, and we’ve heard of some victims losing their life savings, which is just heartbreaking.”
Expanding the Regulatory Net
AUSTRAC is extending its focus to previously unregulated areas such as privately managed ATMs and cash-in-transit services. The effectiveness of this approach was demonstrated in a recent investigation that led to the arrest of four individuals involved in a AU$190 million ($118 million) laundering scheme using a security firm’s armored transport unit.
The agency is also targeting money laundering through the gambling sector. In one notable case, the Australian Federal Police charged three members of an alleged Melbourne money laundering syndicate for paying patrons to sign over their winning cheques from electronic gaming machines. The syndicate allegedly laundered millions of dollars in illicit cash through a Springvale licensed gaming venue by buying jackpots from patrons.
Collaboration: The Fintel Alliance Success Story
A cornerstone of AUSTRAC’s strategy is collaboration through its Fintel Alliance—a world-leading public-private partnership where members and law enforcement work together and share data in real-time to target serious crime. The alliance connects experts from major banks, remittance service providers, gambling operators, and law enforcement and security agencies in Australia and overseas.
The Fintel Alliance has been so successful that AUSTRAC is expanding it and making its collaborative data analytics hub a central function going forward. “Together, we are able to do much more than any of us could do alone,” Thomas said. “Fintel Alliance members are working in partnership to fight financial crime – pooling data, sharing insights, and targeting major threats to strengthen financial systems and law enforcement action.”
In one recent operation, the alliance analyzed more than 50 million cash deposit data points from the four largest banks. By combining datasets, using new software, and having analysts from banks and AUSTRAC working together in the same room, they identified major criminal networks now subject to law enforcement action.
The Fintel Alliance’s effectiveness has earned international recognition, receiving the Best Collaboration of the Year Award from the International Compliance Association (ICA). This award recognized their collaborative efforts to identify and disrupt organized crime syndicates using automatic teller machines (ATMs) to launder the proceeds of crime.
Global Context: How Australia Compares
United Kingdom
The UK has positioned itself as one of the world’s most popular gambling markets and has a well-established regulatory framework for combating money laundering. Unlike Australia’s state-by-state approach, the UK has a more centralized system under the UK Gambling Commission (UKGC).
Recent updates to the UK’s AML/CTF requirements for gambling operators, effective November 29, 2024, enhance industry supervision by clarifying the roles of key personnel and ensuring greater accountability. The revised regulations require specific individuals within gambling businesses to hold a Personal Management Licence (PML), including the CEO or managing director, the board chair, the head of AML/CTF, and the nominated officer for reporting.
The UK has also been proactive in addressing emerging risks, including those related to cryptocurrencies. The Gambling Commission has warned operators about AI deepfakes and crypto crash games as emerging money laundering risks. The watchdog has asked operators to be “mindful” of reported cryptocurrency thefts, which could then be laundered through gambling platforms.
Canada
Canada has been working to close long-standing sectoral gaps in its AML regime, with progress acknowledged by the Financial Action Task Force (FATF). The Canadian government has extended and expanded its AML rules through amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
One key step forward has been the expansion of requirements to gather ultimate beneficial ownership (UBO) information. Under the revised legislation, accountants, government officials who handle finance, casinos, precious metal dealers, and real estate agents must collect beneficial ownership data.
More recently, Canada introduced Bill C-2 (Strong Borders Act) in June 2025, which proposes significant amendments to the PCMLTFA. If adopted, these amendments will require all reporting entities to be enrolled with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and will impose much higher penalties for non-compliance.
European Union
The European Union has recently unveiled its new AML/CTF regime, published in the Official Journal of the EU on June 19, 2024. The regime comprises two key components: a new EU AML/CTF authority (AMLA) and an EU Single AML/CTF Rulebook.
The AMLA will be based in Frankfurt and will have direct supervisory powers over selected high-risk financial institutions operating across multiple member states. It aims to ensure uniform application of AML rules across the EU by directly supervising “selected obliged entities” considered high-risk or operating in at least six member states, imposing sanctions on non-compliant entities, and coordinating with national regulators to improve information sharing and enforcement actions.
The EU’s 6th Anti-Money Laundering Directive (AMLD6) extends the requirement for risk assessments to also cover risks resulting from the non-implementation and evasion of targeted financial sanctions. The frequency of these assessments has been extended to four years, and they will be accompanied by recommendations to Member States on measures suitable for addressing newly identified risks.
The Economic Impact of Money Laundering
The global scale of money laundering is staggering. According to various estimates, between $800 billion and $2 trillion is laundered globally each year, representing roughly 2-5% of global GDP. This makes money laundering one of the largest financial crimes worldwide.
In Australia specifically, the anti-money laundering market is projected to grow significantly, from USD 87.3 million in 2024 to USD 209.9 million by 2030, representing a compound annual growth rate of 15.9%. This growth reflects the increasing investment in AML solutions as regulatory requirements become more stringent.
The Road Ahead: Implementation and Enforcement
These historic reforms will help us close a number of gaps that organised crime is out to exploit. Together, we can deliver meaningful reform that will stamp out illegal activity and protect the Australian community from the harm it causes.
AUSTRAC is working with industry to co-develop the detailed ‘Rules’ accompanying the legislative reforms, which are also expected to target cryptocurrency gaming platforms. These are expected to be finalized by August 2025, ahead of the staged enforcement dates. Thomas emphasized the approach they are going to take in enforcing it.
AML is a practice. We won’t be throwing the book at businesses who are trying to follow the law… But if a business is willfully ignoring its obligation to enroll, they will be the focus of our enforcement efforts.
As the pace and sophistication of financial crime accelerates—with criminals leveraging AI and online platforms—AUSTRAC’s evolution is aimed at ensuring Australia’s financial system remains resilient and secure.
