More than 7% of fintech companies headquartered in Australia shut down in 2024, with the blockchain and cryptocurrency market taking the biggest hit, a KPMG study of the country’s fintech landscape found.
The number of independent fintech firms in Australia has declined for two years, falling from 800 firms in 2022 to 767 across all business verticals as of Dec. 9, noted KPMG’s Australia Fintech Landscape 2024 report.
Firms from the blockchain and crypto industry represented 14% of the 60 Australian fintech firms that shut down in 2024. The report said:
“The blockchain and cryptocurrencies space was the hardest hit in the Australian fintech landscape, decreasing by 14% YoY with 74 active firms as of 2024.”
Australian crypto firms take the biggest hit in 2024
According to KPMG, about 4.5% of the 60 firms ceased operations, while 3% shut down due to mergers and acquisitions (M&A). Most of the M&A deals were driven by strategic needs, with buyers seeking to enhance specific capabilities.
The KPMG report also attributed the decline in blockchain and crypto firms to the growing interest in artificial intelligence. Still, recent pro-crypto events, such as the approval of the spot Bitcoin (BTC) exchange-traded funds in the United States, may reverse the trend in 2025, KPMG said.
The growing interest in alternative investments supported by US rate cuts in the coming months may further the establishment of new crypto and blockchain firms in the coming year.
Giving crypto firms the iron-fist treatment
On Dec. 4, the Australian Securities and Investment Commission (ASIC) issued a consultation paper proposing a blanket financial licensing regime for most crypto firms in Australia.
Related: Australia begins consultation on OECD crypto reporting framework
Two days later, on Dec. 6, Australia’s national financial intelligence agency — the Australian Transaction Reports and Analysis Centre (AUSTRAC) — revealed plans to focus on the cryptocurrency industry in 2025. AUSTRAC CEO Brendan Thomas said that crypto ATMs are attractive avenues for money laundering:
“This is the first step in AUSTRAC’s focus to reduce the criminal use of cryptocurrency in Australia. We will be focusing on this industry over the course of next year.”
Crypto ATM operators in Australia are already required to register with AUSTRAC, undertake transaction monitoring and implement Know Your Customer (KYC) information checks on users.
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