Australia's financial intelligence unit AUSTRAC has released three companion documents to its 2024 national risk assessments, identifying artificial intelligence and virtual assets as emerging accelerants reshaping money laundering, terrorism financing and proliferation financing risks.
The publication comes seven weeks before tranche 2 obligations under the reformed Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act take effect on 1 July. These obligations will bring an estimated 80,000 to 90,000 additional entities within AUSTRAC's regulatory perimeter, significantly expanding the scope of Australia's AML/CTF regime.
Regime expansion under tranche 2 reforms
The reforms extend AML/CTF obligations to a broad range of professional and commercial sectors. Newly covered entities include real estate professionals, lawyers, accountants, conveyancers, dealers in precious metals and additional virtual asset service providers. Norton Rose Fulbright estimates that the changes will add 80,000 to 90,000 reporting entities to the roughly 17,000 currently regulated, representing a roughly fivefold expansion of the regime.
Existing reporting entities have been subject to the reformed AML/CTF Act since 31 March, while the new tranche 2 entities will begin complying from 1 July.
AI recognised as cross-cutting financial crime accelerant
For the first time, AUSTRAC's risk assessments treat artificial intelligence as a cross-cutting accelerant rather than a single channel of abuse. In its money laundering update, AUSTRAC highlights several AI-enabled methods, including identity fabrication, fake document generation, laundering of scam proceeds and transaction structuring designed to mimic legitimate customer behaviour.
The proliferation financing update identifies four key AI-related use cases by sanctioned-state actors: automating shell-company networks, generating fictitious entities, producing falsified trade documentation and optimising sanctions evasion efforts.
Virtual assets and state-linked crypto activity
The documents also underline the role of virtual assets in proliferation financing and sanctions evasion. AUSTRAC disclosed that DPRK-linked actors stole more than US$2 billion in crypto from Bybit in 2025, describing it as the largest known instance of state-linked crypto revenue generation globally. This incident is presented as an example of how virtual assets can be exploited at scale by sanctioned-state actors.
By naming artificial intelligence and virtual assets as accelerants across money laundering, terrorism financing and proliferation financing, AUSTRAC's latest publications signal a heightened supervisory focus on technological enablers of financial crime as Australia prepares for a substantial expansion of its AML/CTF reporting population.
