Austrac seems to be getting itself wedged, between making the Banks responsible for money laundering compliance and wreaking havoc in peoples lives.
The Banks receive massive fines for not detecting money laundering, but are told to tread carefully when trying to avoid it, well that's what it looks like.
Well it looks like that, but it sounds like another Government dept wading around in water too deep for them.?
The anti-money laundering regulator believes the mass debanking of cryptocurrency traders will lead to more criminal activity, not less.
From the article:
The anti-money laundering regulator is warning banks against large-scale ‘debanking’ of customers for dealing in cryptocurrencies and remittance services, saying it expects deposit takers to have systems in place to differentiate good operators from bad ones.
Austrac issued the stern warning against debanking - where a bank stops dealing with a customer - amid concerns from operators in the cryptocurrency sector that they had been exiled from the Australian banking system because they ran businesses dealing in the blockchain-based currencies.
The regulator said the debanking of account holders can have a “devastating impact” on individuals and small businesses.
“The effect of debanking of legitimate and lawful financial services businesses can increase the risks of money laundering and terrorism financing and negatively impacts Australia’s economy,” Austrac said in its statement.
“For this reason, Austrac continues to discourage the indiscriminate and widespread closure of accounts across entire financial services sectors.”
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A Senate inquiry into Australia becoming a financial services hub recently heard evidencefrom small businesses specialising in trading cryptocurrency on the impacts of debanking – a now industry-wide practice.
The banks have in recent months defended their decisions to close accounts, saying they do so to ensure they are adhering to anti-money laundering and counter-terrorism financing laws.
Austrac brushed off that defence from the banks, saying it had higher expectations the banks would not deem a customer high risk because of the sector they worked in.
“Although the decision to close an account may remain a necessary risk control, Austrac considers with appropriate systems and processes in place, banks should be able to manage high-risk customers, including those operating remittance services, digital currency exchanges, not-for-profit organisations (NPO) and financial technology (FinTech) businesses,” the regulator said.
“Austrac expects banks and all regulated businesses to adopt a case-by-case approach to managing ML/TF (money laundering/terrorism financing) risks. This expectation extends to the importance in continuing to assess the particular risks relating to their business customers in line with the risk-based approach.”?
Now that sounds like a " we have a problem, you solve it", sort of explanation. The funny part is Austrac will fine them billions if they find that it was used for money laundering.
It's a shame AUSTRAC aren't listed on the asx, you could put me down for some of their shares.?