Banks have welcomed fresh powers to protect international students vulnerable to money laundering schemes linked to cryptocurrency and crypto ATMs.
Changes to anti-money laundering and counter terror laws were announced by Home Affairs Minister Tony Burke in a speech at the National Press Club on Thursday.
Banks will now have the power to disrupt the use of mule accounts by money launderers, which involves criminals taking over legitimate bank accounts.
A bank will be able to check a visa-holder’s status when they suspect “mule activity”.
They can then use this to help decide whether the account is being used by criminals and whether to close them.
Senior lecturer Anton Moiseienko said visa information would be useful to banks because of international students or other visa holders being more vulnerable to recruitment by money mules.
“If you’re an international student, you’re in a country for a limited period of time,” Dr Moiseienko said.
“Then if someone says: ‘I’ll pay you to get your bank account and use it’, you might not appreciate the risks related to that and the liabilities you’re exposing yourself to.”
Australian Banking Association chief executive Simon Birmingham welcomed the changes and said having access to visa status was a “sensitive and collaborative step” in shutting down mule accounts.
Under the changes, the head of Australia’s money laundering agency AUSTRAC will also be able to restrict or prohibit high-risk products, services or delivery channels, including crypto ATMs.
The agency estimates 85 per cent of transactions sent by top users of crypto ATMs are the proceeds of scams or money mule behaviour.
“Having a power like this enables the CEO to adapt to the evolving risk environment in more responsive ways,” AUSTRAC chief executive Brendan Thomas said.
“For example, crypto transactions are becoming integrated into money laundering methodologies and crypto ATMs present even more risks due to the ability to turn cash into digital currency that can be sent instantly and virtually anonymously across the globe.”
AUSTRAC’s crypto taskforce, set up in December, estimated almost 150,000 transactions occur and about $275 million is moved through crypto ATMs in Australia annually.
In a sample of 90 of the most prolific crypto ATM users across Australia, AUSTRAC and its law enforcement partners found 85 per cent were scam victims or money mules who had been tricked or coerced into moving money.
Dr Moiseienko said it would be a “very dramatic step” if the government eventually decided to outlaw crypto ATM exchange because of its high risk.
“It remains to be seen whether the government actually acts in that dramatic fashion, or whether we’re just going to see a greater regulatory and supervisory focus on crypto ATMs, which would be a much more conventional AUSTRAC approach,” Dr Moiseienko said.
Opposition Leader Sussan Ley also welcomed the proposed laws, saying there were in the national interest.
“Anything that is an intervention with criminals, whether they be around currency manoeuvres or something to do with children and online safety, these are things we’ll look at closely and carefully,” she said.
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