Australia’s financial crime agency Austrac has included decentralised finance and non-fungible tokens (NFTs) in a list of emerging risks in its latest financial crime guide, saying the increase in their use over the past couple of years has created opportunities for money laundering and other criminal activities.

The Austrac guide, Criminal Abuse of Digital Currencies, lists customer behaviours that should trigger enhanced customer due diligence.

Top of the list are customers who are reluctant to provide personal information or who provide photos or screen shots rather than original documents.

Other triggers include difficulty in establishing a company’s beneficial ownership, the customer frequently changing their email addresses, or the customer being difficult to contact.

It said financial institutions should be suspicious of customers with unexplained sources of wealth, customers who purchase amounts of digital currency that are not consistent with their available wealth, and customers who make numerous transactions involving fiat currency deposits and digital currency withdrawals via cryptocurrency ATMs.

Austrac said the supposedly anonymous and borderless nature of digital currencies presents a risk for the facilitation of serious crimes, including money laundering, trading in illicit products, terrorism financing, scams and tax evasion.

But it said questionable transactions can be traced if financial institutions, law enforcement agencies and government bodies work co-operatively.

It gave the example of terrorist groups that started raising funds via social media in 2019. They requested bitcoin donations, offering instructions on how to make donations that would not be traced.

“Working together, international law enforcement agencies used the traceability of digital currency to dismantle three terrorist financing cyber-enabled campaigns. Agencies seized millions of dollars, 300 digital currency wallets, websites and social media pages all related to the terrorist groups.”