The corporate regulator has moved to end the sale of controversial Virtual Money ATM cards, in response to concerns about Texas-based company Virtual Money’s operations in Australia.
The Australian Securities and Investments Commission (ASIC) determined that Virtual Money ATM cards, which critics argue facilitate money laundering and illicit trade, are non-cash payment facilities and therefore financial products, meaning they cannot be sold without an Australian Financial Services License (AFSL). Virtual Money does not hold such a licence.
ASIC said that Virtual Money and its Australian division co-operated with its investigation, have agreed not to sell any more cards and have closed their Australian bank account. Existing cardholders are still able to withdraw their remaining funds.
Virtual Money cards operate similarly to debit cards, enabling consumers to deposit money into an Australian bank account for later withdrawal or transfer to another Virtual Money cardholder anywhere in the world. They have been described by some as a money launderer’s dream.
ASIC executive director of enforcement Jan Redfern said it was important for foreign companies intending to operate in Australia to familiarise themselves with local licensing requirements and regulations. She also warned local agents to ensure they complied with the law.
“In some cases, the foreign company may itself have obtained an AFSL. In other cases, the local agent may need to obtain one. Both parties need to familiarise themselves with our licensing requirements and ensure they adhere to them.”
