AML & KYC compliance for cryptos

Deliver instant, trusted identity verification in a single click. As cross-border money flows accelerate, so does pressure to meet crypto KYC, crypto AML and AUSTRAC compliance requirements.  

Crypto users expect onboarding to feel as seamless as digital payments. But manual, document-heavy KYC processes slow approvals, create friction and push genuine customers away. Modern crypto platforms need verification that reduces friction and stands up to regulatory scrutiny. 

With the rise of cryptocurrency in Australia, what are the rules around Know Your Customer and Anti-Money Laundering?

The last few years have seen rapid growth in cryptocurrency adoption across Australia. As the Australian Treasury notes, digital assets are now a fast-evolving part of the economy, creating new opportunities for investment, payments, and financial innovation.

But it’s a high risk game.

Cryptocurrency is increasingly used to buy and sell lethal drugs on the dark web and by drug cartels seeking to launder their profits. In addition, some terrorist groups are known to have solicited cryptocurrency donations worth millions of dollars through online social media campaigns.

Unsurprisingly, the rise in scams and the potential for using cryptocurrency in money laundering has led to growing calls for regulation. The Financial Action Task Force (FATF) is urging nations to intensify the implementation of a risk-based approach to prevent anti-money laundering and terrorist financing through cryptocurrency.

As cross-border money flows accelerate, so does the pressure on fraud and onboarding teams. Crypto moves fast, and your onboarding should too.

Additionally, regulators like AUSTRAC are expanding their scope beyond exchanges to the full virtual asset ecosystem, raising expectations around KYC, transaction monitoring and data sharing.

That means crypto firms need to operate with the same level of regulatory maturity as traditional financial institutions, without compromising the user experience.

With GBG Go, you can deliver instant, trusted identity verification with a single click

Why crypto platforms need faster, smarter onboarding

Crypto is borderless, but KYC processes often aren’t. Fragmented identity checks, diverse regulations and complex compliance requirements can slow onboarding and create unnecessary friction for genuine customers.

At the same time, fraud pressure is increasing. As digital transactions accelerate, bad actors exploit gaps in onboarding workflows to create fake accounts, use synthetic identities and abuse promotions.

To stay competitive, crypto and payments platforms need a new approach. We work with firms to combine speed, strong identity verification and real-time decisioning from the very first interaction.

Anti-money laundering and cryptocurrency 

Money laundering is the term for financial transactions that enable criminals to change illegally obtained money or other assets into “clean” money or assets with no obvious link to their criminal origins. It can involve transactions with financial institutions, businesses or private individuals. 

Cryptocurrency transactions may create a higher risk for money laundering due to their anonymity, cross-border nature, and lack of centralised oversight. 

That’s where Anti-Money Laundering regulations come in. 

AML compliance is designed to protect financial systems by keeping people from carrying out financial transactions with money from illegal sources. 

In 2018, AUSTRAC, Australia’s financial intelligence agency and anti-money laundering and counter-terrorism financing regulator, implemented AML/CTF laws for digital currency exchange (DCE) providers operating in Australia. 

DCEs with a business operation in Australia must register with AUSTRAC and meet the AML/CTF compliance and reporting obligations. The laws cover any service that involves the exchange of any fiat currency, whether or not in Australian dollars, to cryptocurrency and vice versa. 

Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, DCEs must collect information to establish customers’ identities, monitor transactions, have a system to monitor suspicious activity, report any suspicious transactions over $AU10,000 and establish an AML/CTF compliance program. 

These laws are designed to help protect DCEs from money laundering and terrorism financing while helping to strengthen public and consumer confidence in the cryptocurrency sector. 

Being AML compliant has many benefits for DCEs, including: 

  • Keeps customer data secure across numerous physical and digital channels. 
  • Uses global customer databases to check the backgrounds of new customers and compare against lists of sanctioned individuals. 
  • Monitors transactions closely and reports illegal or suspicious activity. 
  • Creates automated fraud detection services that can stand in the way of identity theft or block account access. 
  • Preserves and enhances an organisation’s reputation and maintains value for shareholders by avoiding association with criminal activity. 
  • Reduces fines or costs associated with non-compliance with AML regulations. 

As cryptocurrency transactions become faster and more global, AML frameworks need to evolve alongside them. Traditional approaches that rely on manual review or disconnected systems can struggle to detect risks in real time, particularly in cross-border environments. 

This is why modern AML strategies increasingly combine identity verification at onboarding with ongoing transaction monitoring, ensuring that risk is addressed from the first interaction. 

Preventing Crypto Crime with KYC 

Know Your Customer (KYC) is the mandatory process of verifying a person’s identity when onboarding them as a customer and over time. It is a critical part of AML compliance. 

One of the core activities of KYC is customer due diligence (CDD). This includes collecting personal information to verify a customer’s identity and prevent fraud before they engage in financial activity with an organisation, and checking personal customer information against global watch lists or sanctions against individuals.

For business customers, this extends beyond individual identity verification into Know Your Business (KYB) checks. This typically includes identifying ultimate beneficial owners (UBOs) as well as verifying company registration details and key personnel.


In practice, KYB processes typically involves:

  • Verifying company details using official registry sources, such as ASIC company extracts
  • Identifying and validating directors, shareholders and key personnel
  • Mapping ownership structures to uncover beneficial ownership and control
  • Cross-checking entities and individuals against sanctions, watchlists and adverse media

AUSTRAC regulations require DCEs to document the procedures they use to collect and verify both customer (KYC) and business (KYB) information as part of their AML/CTF compliance program.

The verification of KYC information generally involves asking a customer to provide their details and confirming those details against identification documents such as a driver’s licence or passport, or an online identification verification service. 

You must collect and verify KYC information before providing the cryptocurrency service to that customer. The types of information that you must collect and verify depends on the type of customer. AUSTRAC sets standard guidelines for information relating to individuals, domestic companies and trustees of trusts. 

The second part of KYC is creating risk profiles or conducting risk assessments. 

Organisations may apply enhanced due diligence (EDD) for customers identified as high-risk, such as a politically-exposed person (PEP). 

According to AUSTRAC, EDD measures must be applied in the following cases: 

  • Collection of core identity information: full legal name, residential address and date of birth.
  • Verifying government-issued ID documents: such as passports or driver’s licences.
  • Electronic verification checks: cross-referencing customer details against trusted government or third-party data sources.
  • Biometric verification: such as liveness checks using facial recognition to confirm the customer matches their identity documents.
  • Ongoing monitoring: regular review of customer activity to detect suspicious behaviour and updating customer risk profiles.

Crypto moves fast. Your onboarding should too

Crypto platforms can’t afford to choose between compliance and conversion. As regulatory expectations increase and fraud tactics evolve, onboarding needs to be both frictionless and robust from the very first interaction. 

With modern verification approaches, you can bring together identity, business and risk signals in real time. 

Learn how to reduce onboarding friction and verify customers in one click