Australia's financial intelligence agency, AUSTRAC, has kicked off supervision campaigns aimed at over-the-counter (OTC) crypto operators and local cryptocurrency exchanges. The move, announced this week, signals a tightening of regulatory scrutiny on the country's digital asset sector. Separately, newly enacted reforms extend AUSTRAC's reach to cover cryptocurrency custody and brokerage services for the first time.
What the campaigns target
AUSTRAC's supervision campaigns zero in on OTC desks and domestic exchanges — two corners of the market that have historically operated with less oversight than traditional financial institutions. OTC operators, which facilitate large trades off public order books, and smaller local exchanges are now subject to more frequent compliance checks. The agency hasn't specified how long the campaigns will run, but they're active as of May 2026.
Broader oversight for custody and brokerage
The latest regulatory reforms expand the definition of a regulated entity under Australia's anti-money laundering and counter-terrorism financing framework. Custody providers — firms that hold digital assets on behalf of clients — and brokerage services that facilitate crypto trades must now register with AUSTRAC and meet reporting obligations. Previously, the rules mainly applied to exchanges and remittance services. The changes bring Australia closer to the regulatory standards seen in jurisdictions like Singapore and the UK.
Why now?
AUSTRAC's stepped-up approach follows a year of increased crypto adoption in Australia and growing concerns about illicit finance. OTC desks have been a particular focus globally, given their role in moving large sums without transparent order books. The timing also aligns with broader international pressure on regulators to tighten oversight of digital assets. The campaigns and reforms aim to close gaps that bad actors could exploit.
What happens next
OTC operators and exchanges should expect on-site inspections and requests for transaction records in the coming weeks. Firms that fail to comply risk penalties, including license suspensions. The new custody and brokerage rules take effect immediately, giving firms a grace period to register. AUSTRAC has said it will publish guidance documents for affected businesses later this month.
