It started with a knock at 6am. "Daniel," a 32-year-old logistics manager, had spent two years trading on a peer-to-peer crypto exchange and occasionally helped a friend "cash out" through his own bank account when the friend's account was frozen. He didn't think much of it, until the AFP executed a search warrant on his home, seized his phone, laptop and hardware wallet, and told him he was being investigated for money laundering under section 400.9 of the Criminal Code (Cth).
Why This Happens More Often Than People Expect
Crypto-related money laundering charges have increased as AUSTRAC and the AFP build out dedicated crypto-asset investigation capability. The person caught up rarely fits the "criminal mastermind" image. Three patterns come up again and again.
The "Pass-Through" Bank Account
Letting a bank account or crypto wallet be used to receive and forward funds for someone else, even a friend or family member, can amount to "dealing" with money or property under Commonwealth law. It doesn't matter whether a fee was charged or any benefit was received. What matters is whether a reasonable person in that position would have suspected the source of the funds.
Accepting Crypto Payment Without Asking Enough Questions
Being paid in crypto for legitimate goods or services is common and lawful. The risk arises when the payment, timing, or counterparty doesn't add up, and the recipient doesn't ask. Investigators look closely at whether questions were asked, avoided, or actively discouraged.
Being an Unwitting Money Mule
Money mule recruitment through fake remote job ads, "payment processing" roles, or romance scam manipulation is increasingly common, and the person recruited often has no idea they're moving scam proceeds. Being a money mule is still a criminal offence even where the person genuinely didn't know the full story, though that lack of knowledge can be central to the defence.
The Charge: Section 400.9 of the Criminal Code (Cth) Explained
Section 400.9 is the most frequently charged Commonwealth money laundering offence, and it works differently to sections 400.3 to 400.8. The prosecution doesn't need to prove the accused actually knew the funds were proceeds of crime. It only needs to establish that it was reasonable to suspect, in the circumstances, that the money or property was derived from an indictable offence.
The maximum penalty depends on the amount involved: three years' imprisonment where the amount is $100,000 or more, and two years' imprisonment where it's less than that. There's also a specific statutory defence: if the accused can show they had no reasonable grounds to suspect the money or property was connected to unlawful activity, the offence doesn't apply. This is exactly the kind of context a properly reviewed transaction history can support.
The NSW State Equivalent: Section 193C, Crimes Act 1900 (NSW)
Many of these matters are charged at the state level instead of, or alongside, the Commonwealth offence. Under section 193C(1) of the Crimes Act 1900 (NSW), dealing with property reasonably suspected of being proceeds of crime is a summary offence, carrying a maximum penalty of two years' imprisonment, and is heard in the Local Court (including Downing Centre and Parramatta) rather than escalating directly to the District Court. Which pathway a matter takes, Commonwealth or state, summary or indictable, materially affects strategy from the outset.
What Actually Matters in the First 48 Hours
- What was seized, and under what power. Search warrants have limits, and police sometimes seize more than the warrant authorises.
- What was said during the search. Trying to "explain things" to police on the spot, however innocent it feels at the time, is rarely the right move.
- The transaction trail. Blockchain analysis cuts both ways. Properly mapped, the transaction history can support a defence that there were no reasonable grounds to suspect the funds were tainted.
How Bartley Legal Approaches These Matters
These matters sit at the intersection of criminal defence and AML/CTF compliance, an intersection most lawyers without a regulatory background don't fully see. Understanding what a reporting entity would have been required to flag, and whether a private individual's conduct even falls within that framework, often shapes the entire defence strategy. That perspective, combined with a background in NSW law enforcement, is what Bartley Legal brings to these matters across NSW and Australian courts.
If you've had contact from police about crypto transactions, had devices seized, or you're concerned about a past transaction, earlier advice generally means more options on the table.
Call Bartley Legal on +61 461 400 310 for a confidential discussion.
This page contains general information only and does not constitute legal advice. The applicable law in NSW is complex and the right course of action depends on your specific circumstances. Contact Bartley Legal directly for advice tailored to your matter.
