Australian Regulator Warns AI Is Accelerating Money Laundering and Scam Activity

Australia's financial intelligence agency warned on May 12 that artificial intelligence is rapidly becoming a core component of money laundering and scam operations, with criminals using the technology to fabricate identities, forge official documents, and disguise the proceeds of fraud at a scale and speed that manual techniques cannot match. The alert from AUSTRAC arrives alongside new data showing Australians lost more than $2 billion to scams in 2025, as regulators across the country report that AI is making financial crime more sophisticated and harder to detect.

The Details

AUSTRAC, the country's anti-money laundering and counter-terrorism financing regulator, published annual updates to its risk guidelines on May 12 alongside a broader snapshot of Australia's financial crime landscape. The agency said the country's money laundering, terrorism financing, and proliferation financing risks are becoming more complex and interconnected, driven by technology, globalisation, and the increasing overlap between legitimate business activity and illicit financial flows. The updated guidelines reflect AUSTRAC's assessment that criminal networks are exploiting technological change to operate across multiple financial channels and jurisdictions, complicating the task of detecting illicit flows within the broader economy.

AUSTRAC Chief Executive Officer Brendan Thomas said criminals are increasingly deploying artificial intelligence as part of their money laundering toolkit. "Criminals are increasingly using AI as a part of their money laundering toolkit—fabricating identities, forging documents and rapidly disguising the proceeds of scams," Thomas said in the agency's May 12 risk snapshot update. He added: "In some cases, technology is automating what used to be manual laundering techniques, raising the sophistication and scale of financial crime." Thomas's remarks highlight the regulator's view that automation is now a defining feature of contemporary money laundering methods.

Bloomberg reported the AUSTRAC warning on May 12 in the context of the agency's annual risk guideline updates, attributing the comments to Thomas.

The coordinated warnings from AUSTRAC, ASIC, and the ACCC on May 12 indicate that multiple Australian regulators are now identifying artificial intelligence as a common accelerant across different categories of financial crime, from institutional money laundering to consumer-facing investment fraud.

Separate warnings from Australia's other financial regulators describe a parallel rise in AI-driven fraud targeting consumers. The Australian Securities and Investments Commission said scammers are using artificial intelligence to create polished fake investment advertisements, fraudulent videos, fabricated endorsements, and highly targeted digital ads designed to reach potential victims through online platforms.

ASIC's Alan Kirkland said: "Scammers are using artificial intelligence to make fake investment ads look more polished, more convincing and harder to spot."

ASIC said it coordinated the removal of 11,964 phishing and investment scam websites in 2025, a 90% increase from the 6,270 websites taken down during the prior year. The regulator said that more than 25,000 investment scam and phishing websites have been removed since ASIC launched its dedicated takedown service in 2023. The growth in removals reflects both the expanding volume of scam infrastructure and the regulator's intensified efforts to combat online fraud.

The Australian Competition and Consumer Commission's National Anti-Scam Centre said Australians reported $2.18 billion in scam losses in 2025, including $837.7 million attributed specifically to investment scams. The ACCC said Australians filed 481,523 scam reports over the course of the year. The commission also reported that online-based scam losses increased 21% compared with the previous year, and warned that AI is increasing the sophistication of scam activity. Investment scams remained the costliest category of reported fraud by total dollar value, underscoring the financial scale of the threat AUSTRAC identified in its money laundering assessment.

Context

AUSTRAC published three separate 2026 risk updates on May 12, designed to be used alongside its 2024 national risk assessments to give regulated businesses a year-on-year picture of Australia's financial crime environment. Across all three risk areas—money laundering, terrorism financing, and proliferation financing—the agency said criminals are increasingly relying on lawful financial services, legitimate trade flows, professional facilitators, and complex corporate structures to hide illicit funds inside otherwise routine transactions. The approach allows criminal networks to obscure the origins of illicit money by embedding it within ordinary commercial activity, leveraging the same infrastructure used for legitimate international business and banking relationships.

What's Next

ASIC's takedown program has removed more than 25,000 investment scam and phishing websites since its launch in 2023, and the sharp increase in 2025 removals indicates the volume of fraudulent online infrastructure is accelerating as scammers adopt AI-generated content at scale. AUSTRAC said its updated risk guidelines are intended to help regulated businesses track the evolving threat landscape on an ongoing basis, providing annual benchmarks against its 2024 national risk assessments. The ACCC has emphasized that continued action is critical as annual scam losses exceed $2 billion and AI tools make fraudulent activity increasingly difficult for consumers to identify before significant financial losses accumulate.