Commonwealth Bank Of Australia (CBA) Fined For Crypto KYC/AML Failings


The regulatory authorities of Australia have taken a hard stance against violators of longstanding money laundering and reporting laws regarding the cryptocurrency market, a growing sector in the booming financial industry of Australia. Specifically, the organization has levied a series of serious fines against the Commonwealth Bank of Australia, who recently admitted to a litany of potential violations of existing regulations.

The federal financial agency is known as AUSTRAC, and last year they accused the Commonwealth Bank of a few violations, namely failure to report on suspicious activity which may have occurred involving cryptocurrency trading using their funds.

The bank agreed to a settlement of around AUD $700 million, reportedly the most significant fine in the history of corporate law and punishment within Australia. The fine comes in addition to mounting legal fees, which the company will also be forced to pay. No reports currently hint any additional criminal action against bank executives or employees involved in the accused violations.

Commonwealth Code Violations

The bank officially acknowledged their failings in the timely reporting of suspicious activity. The violations occurred when the bank was late to file 53,006 reports regarding transactions involving AUD $10,000 or more. These filings must happen within ten business days of their taking place, and the bank’s failure to file these transactions in a timely manner constitutes a violation of money laundering reporting laws.

Though they initially claimed that the issue was the result of a coding error, they eventually agreed to the settlement, likely in response to the growing costs of disputing the exact number of reports inside the federal court system. As an alternative, the bank decided to admit fault on the majority of the failures in exchange for a settlement outside of a lengthy legal battle.

This isn’t the only violation; the regulators also got the bank to admit to failure to investigate nearly 150 suspicious reports, most of which were filed significantly late, or not filed at all. Additionally, the organization was not able to secure necessary checks on several suspicious clients, and failed to monitor suspicious accounts over the course of three years, 2012 to 2015.

A Warning Precedent

It is likely that the federal regulators are working to send a message to additional banks who might not be in compliance with federal regulations. Though the regulations have existed within the country for quite some time, the recent surge in Australian interest in cryptocurrencies has caused a litany of additional problems for the regulatory authorities.

Because of the anonymity of cryptocurrencies and the prevalence of crime on the underground market of the blockchain, it has become far too common for criminals to use cryptocurrencies to be used in complex financial crime schemes involving fiat currency. As a consequence, the agency has been clear in the seriousness with which it will address accusations of negligence in the investigation processes of major banks.

Potentially, reports say that the fine for the Commonwealth Bank could have been nearly $1 trillion dollars, each breach carrying a fine of up to AUD $18 million.

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