Latest news with #financialCrimes
ABC News
4 days ago
- Business
- ABC News
Crypto ATMs increasingly used for scams and money laundering: AUSTRAC
Australians are losing millions of dollars each year to scams linked to cryptocurrency ATMs and older people have been the group most caught up in illicit activity through the machines. Financial crimes agency AUSTRAC has now intervened — introducing sweeping industry-wide controls after uncovering links to scams, money laundering and other illegal activity. The regulator has also refused to renew one crypto ATM (CATM) operator's registration. Cryptocurrency ATMs are located across the country — in petrol stations, convenience stores, supermarkets and takeaway shops. They allow users to convert cash into digital currencies like Bitcoin, which is transferred to a digital wallet. Some machines also let users cash out their cryptocurrency. With banks under growing pressure to crack down on scams and money laundering, authorities warn crypto ATMs are being exploited by criminals. Following a three-month analysis of data from nine crypto ATM operators, AUSTRAC has confirmed the machines are being used for scam and fraud-related transactions. The ABC understands the regulator was able to trace some transactions to scam hotspots in Asia and Europe, as well as groups linked to organised crime. Crypto ATM operators will now face a $5,000 limit on cash deposits and withdrawals, in a effort to limit the financial fallout of scams. AUSTRAC will also enforce enhanced customer due diligence requirements, mandatory scam warnings and more robust transaction monitoring obligations on the operators. The new controls come as fresh data from the Australian Federal Police (AFP) reveals Australians are losing millions of dollars each year to scams involving crypto ATMs. "These conditions are designed to help protect individuals from scams by deterring criminals from directing them to a crypto ATM, as well as to protect businesses from criminal exploitation," AUSTRAC chief executive Brendan Thomas told ABC News. "In light of the risks and harms, we consider it absolutely necessary to ensure the sector meets minimum standards and reduces the criminal misuse of crypto ATMs. "We will continue to monitor the effectiveness of these conditions and adjust them if needed." As part of the compliance crackdown, AUSTRAC has refused to renew the registration of Harro's Empires, a small South Australian crypto ATM operator. The company has been ordered to shut down its four machines, after the agency found ongoing risks that its machines could be exploited by criminals. "This action draws a clear line in the sand and serves as a warning to other digital currency exchange providers that aren't meeting their responsibilities under the Anti-Money Laundering and Counter-Terrorism Financing Act," Mr Thomas said. Australians lost $3 million to scams involving crypto ATMs in the 12 months to January, according to reports made to the Australian Cyber Security Centre. Of the 150 reported incidents, the most common scams were investment scams (63), extortion emails (35), and romance scams (24). Most victims were women over 51. However, total losses are likely to be far higher, as many victims do not report these crimes. "Australia is certainly a key target, given we have high levels of savings and wealth," AFP assistant commissioner for cyber command Richard Chin told ABC News. Mr Chin said that once cash is converted into cryptocurrency and sent to a digital wallet, it's nearly impossible to retrieve. The scammer instructed the man to make several bank withdrawals and deposit the money into crypto ATMs. His funds could not be recovered. "That money goes into an elaborate web of global money laundering and ultimately ends up back with the criminal organisations orchestrating these scams and running them at an industrial scale around the world." Australia has the third-highest number of crypto ATMs in the world, behind the United States and Canada — making it the fastest-growing market globally. In 2019, there were just 23 machines nationwide. Today, there are more than 1,800. "The speed of the growth has concerned us," Mr Thomas told ABC News. "We're worried that growth may be based on illicit activity and people being scammed. "We're not only worried about people being victims of scams, we're also concerned about drug purchases and other money laundering activities occurring through cryptocurrency ATMs." AUSTRAC estimates around $275 million flows through these machines each year across roughly 150,000 transactions. The vast majority — around 99 per cent — are cash deposits used to purchase cryptocurrencies, primarily Bitcoin, Tether and Ethereum. Based on its analysis, AUSTRAC believes one in 10 transactions may be linked to illegitimate activity, including drug trafficking, scams, and organised crime. "Cryptocurrency as an industry represents a significant global money laundering risk. "We see eye-watering sums of money moving across borders for drug purchases, and the proceeds are being scammed," Mr Thomas said. The age profile of crypto ATM users has shocked regulators and closely aligns with the demographic most commonly targeted by international scams. People over 50 account for nearly 72 per cent of crypto ATM transactions by value. Those aged between 60 and 70 make up 29 per cent of all transaction value. These findings are echoed by at least one Melbourne petrol station worker, who spoke to the ABC on condition of anonymity. He said he typically sees two or three older people each week depositing cash into the on-site cryptocurrency ATM. Most, he said, are on the phone receiving step-by-step instructions from someone on how to use the machine. Most scam victims are first contacted online. Last year, Robert (whose name we've changed to protect his privacy) unwittingly became a money mule after applying for a work-from-home job he found online. "They sent me a contract to sign — passport, driver's licence, bank account details, the lot," he said. At first, he was asked to perform simple online tasks like writing product reviews. But later, he received instructions to withdraw money deposited by his 'employer' and put it into a crypto ATM. "She told me to take a photo of the ATM when I got there," Robert recalled. "Then she sent back photos with instructions on what buttons to press. I'd never used one of those machines before — it took me about half an hour to figure it out." He was told to open a second account at another bank and over several weeks, he deposited thousands of dollars into a digital wallet through his local crypto ATM. Eventually, his banks flagged the activity. "They said I might have been involved in something fraudulent. I was worried. I'm not that kind of person." Robert reported the incident to the ACCC's Scamwatch, which advised him to cancel all forms of ID and cease contact with the scammers. Crypto ATMs have made international headlines for the wrong reasons. They've been effectively banned in countries like the United Kingdom and Singapore, and are heavily restricted in others. In the US, lawmakers are considering new legislation to regulate the industry. Several lawsuits have already been filed, including one by the state of Iowa, which is suing operators Bitcoin Depot and CoinFlip for $US20 million ($31 million) over scam losses. In Australia, AUSTRAC last year established a dedicated taskforce to investigate the sector and introduced new compliance requirements aimed at stopping misuse. But Mr Thomas acknowledges that regulation hasn't kept pace with the industry's rapid growth. He has called for broader regulation of the cryptocurrency sector to support legitimate operators and protect consumers. "Our taskforce is working to understand the money laundering risks of cryptocurrency in Australia and is collaborating closely with industry to determine the controls we need," he said. Global players such as CoinFlip, Localcoin, ByteFederal and Bitcoin Depot are competing for market share against local players in Australia's booming crypto ATM market. Operators charge users commissions of up to 20 per cent per transaction, in addition to other fees. The industry's peak body, the Digital Economy Council of Australia (DECA), acknowledges some ATMs are being exploited for scams and money laundering. However, DECA chair Paul Derham argued most customers are legitimate traders simply trying to access digital assets in the face of banking restrictions. "One of the challenges Australians face is that if they want to buy crypto, sometimes their banks won't let them. "So they withdraw cash and go to a crypto ATM instead," said Mr Derham, who is also a lawyer representing several global ATM operators. Mr Derham said while there are different views, broadly speaking the industry does not support transaction limits of $5,000. He said there would be additional compliance costs for businesses. Mr Derham said customers may also use multiple CATMs to get around the new conditions. "The industry would prefer to control these thresholds themselves using their own risk based approach — which they are legally required to do anyway. "For example, if a person is considered low risk and has a long history with a CATM provider, they should have a higher threshold." Asked whether the business would remain viable if they could no longer be used for scams and money laundering, Mr Derham said: "No-one's been able to crack the code to stop scams. Even Australia's biggest banks haven't been able to completely eliminate the risk. "The reality is that some scams are being run by highly coordinated international networks — including state-backed actors — who are actively targeting vulnerable people."
The National
4 days ago
- Business
- The National
UAE Central Bank fines exchange house Dh3.5m for failure to comply with anti-money laundering law
The UAE Central Bank imposed a fine of Dh3.5 million ($953 million) on an exchange house for failing to comply with the country's law on anti-money laundering and counter-terrorism financing (AML/CFT), as it continues its crackdown on financial crimes. The Central Bank said on Monday that it assessed the findings of an examination that revealed offences by the exchange house, which was not named. It has been cracking down on regulatory non-compliance in recent weeks. Last week, it imposed a Dh100 million fine on an exchange house for 'significant failures' in its AML/CFT framework and related regulations. The regulator last month also fined an exchange house Dh200 million for the same offence. A Dh500,000 fine was also imposed on a branch manager, who was banned from working in any licensed financial institutions in the UAE. The Central Bank also fined two branches of foreign banks operating in the country a total of Dh18.1 million last week for breaching anti-money laundering regulations. 'The UAE Central Bank, through its supervisory and regulatory mandates, endeavours to ensure that all exchange houses, their owners, and staff abide by the UAE laws, regulations and standards … to maintain transparency and integrity of the financial transactions and safeguard the UAE financial system,' it said. The UAE has introduced a series of initiatives to regulate the country's financial sector and has passed strict laws to prevent money laundering and the financing of terrorism. The Central Bank unveiled AML/CFT guidelines in 2023 for licensed financial institutions – including banks, finance companies, exchange houses, insurance companies, agents and brokers. The guidelines focus on the use of digital identification systems by licensed financial institutions to address customers' due diligence obligations. Last year, the UAE also announced an action plan to boost its fight against illicit financial activity, introducing the 2024-2027 National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing. The strategy has 11 goals outlining the 'legislative and regulatory reforms the UAE is taking to prevent the impact of illegal activities on society'. It was developed by the General Secretariat of the National Committee using World Bank Group methodology to ensure it meets international standards. In August, the government amended its laws against money laundering and the financing of terrorism and crime groups and formed a national committee on these crimes. In 2021, the UAE also established the Executive Office of Anti-Money Laundering and Counter-Terrorism Financing, an agency to deal with money launderers, as well as organisations and people suspected of financing terrorists and organised crime.
The Independent
29-05-2025
- Business
- The Independent
Crypto crime spills over from behind the screen to real-life violence
A man says he was tortured for weeks in a New York townhouse. Another in Paris was held for ransom and his finger cut off. A couple in Connecticut were carjacked, beaten and thrown into a van. All, authorities allege, were victims tied to cryptocurrency-related crimes that have spilled out from behind computer screens and into the real world as the largely unregulated currency surges in value. While crypto thefts are not new, the use of physical violence is a far more recent trend, said John Griffin, a finance professor at the University of Texas in Austin who tracks financial crimes. 'I think this kind of physical violence is a natural manifestation of the emboldened nature of crypto activities,' he said. 'Things that might clearly be outside of social norms in other spaces — like robbing a bank — are somehow just part of the game here.' Kidnapping, burglary and torture allegations In the New York case, two American crypto investors — John Woeltz and William Duplessie — have been arrested on kidnapping and assault charges in recent days after a 28-year-old Italian man told police they tortured him for weeks to get his Bitcoin password. Attorneys for both men declined to comment. While the allegations are still emerging, they come just weeks after 13 people were indicted on federal charges in Washington, D.C., accused of combining computer hacking and money laundering with old-fashioned impersonation and burglary to steal more than $260 million from victims' cryptocurrency accounts. Some are accused of hacking websites and servers to steal cryptocurrency databases and identify targets, but others are alleged to have broken into victims' homes to steal their 'hardware wallets' — devices that provide access to their crypto accounts. The case stemmed from an investigation that started after a couple in Connecticut last year were forced out of a Lamborghini SUV, assaulted and bound in the back of a van. Authorities allege the incident was a ransom plot targeting the couple's son — who they say helped steal more than $240 million worth of Bitcoin from a single victim. The son has not been charged, but is being detained on an unspecified 'federal misdemeanor offense' charge, according to online jail records. Police stopped the carjacking and arrested six men. Meanwhile in France, kidnappings of wealthy cryptocurrency holders and their relatives in ransom plots have spooked the industry. Attackers recently kidnapped the father of a crypto entrepreneur while he was out walking his dog, and sent videos to the son including one showing the dad's finger being severed as they demanded millions of euros in ransom, prosecutors allege. Police freed the father and arrested several suspects. Earlier this year, men in masks attempted to drag the daughter of Pierre Noizat, the CEO and a founder of the Bitcoin exchange platform Paymium, into a van, but were thwarted by a shopkeeper armed with a fire extinguisher. And in January, the co-founder of French crypto-wallet firm Ledger, David Balland, and his wife were also kidnapped for ransom from their home in the region of Cher of central France. They also were rescued by police and 10 people were arrested. Cryptocurrency crime likely fueled by big money, little regulation The FBI recently released its 2024 internet crime report that tallied nearly 860,000 complaints of suspected internet crime and a record $16.6 billion in reported losses — a 33% increase in losses compared with 2023. As a group, cryptocurrency theft victims reported the most losses — more than $6.5 billion The agency and experts say the crypto crime underworld is likely being fueled by the large amounts of money at stake – combined with weak regulation of cryptocurrency that allows many transactions to be made without identity documents. Violence may be increasing for several reasons including that criminals believe they can get away with crypto theft because transactions are hard to trace and often cloaked by anonymity, according to the crypto tracing firm TRM Labs. And crypto holders are getting easier to identify because of the prevalence of personal information online and people flaunting their crypto wealth on social media, the firm says. Phil Ariss, TRM Labs' director of UK public sector relations, said crypto also may be attracting criminal groups that have long used violence. 'As long as there's a viable route to launder or liquidate stolen assets, it makes little difference to the offender whether the target is a high-value watch or a crypto wallet,' Ariss said in a statement. 'Cryptocurrency is now firmly in the mainstream, and as a result, our traditional understanding of physical threat and robbery needs to evolve accordingly."
