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Cryptocurrency platforms in Australia are reportedly being used to launder nearly half of the proceeds from financial scams.
That’s according to the Australian Financial Crimes Exchange (AFCX), a non-profit organization that sourced data from the country’s major banks.
About 47% of the funds from scams were reportedly channeled to cryptocurrency-related accounts in the final month of the fiscal year.
“Once funds have been transferred to crypto, it is extremely difficult to recover them,” AFCX managing director David Pegley stated.
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The AFCX has estimated a staggering loss of over $3 billion by Australians to financial scams in the past year. In June alone, consumers lost $38 million due to scams.
Banks have been wary of crypto exchanges, viewing them as a potential risk in the financial infrastructure. However, the crypto industry tends to argue that the real culprits are social media and telecom companies, which provide scammers access to potential victims.
Pegley noted that the laundered funds often end up supporting organized crime syndicates involved in illicit activities like arms and drug trafficking.
Anna Bligh, the chief executive of the Australian Banking Association, fears that the laundered scam money via cryptocurrency platforms becomes “virtually impossible to recover”.
She emphasized the need for more stringent measures to prevent the misuse of cryptocurrency as a conduit for scam proceeds. “To protect customers, several banks have responded by imposing limitations on transfers to these exchanges,” she added.
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Commonwealth Bank, ANZ, National Australia Bank, Westpac, and Bendigo & Adelaide Bank are among those banks that have initiated measures to restrict transactions to certain crypto exchanges deemed “high-risk”.
Many banks have also halted transfers to Binance (CRYPTO: BNB), which currently faces legal challenges. The U.S. Securities and Exchange Commission alleges that Binance CEO Changpeng Zhao deliberately flouted regulations.
Additionally, the Australian Securities and Investments Commission revoked Binance’s local derivatives license in April.
Produced in association with Benzinga