A blitz on dormant registered crypto exchanges is being undertaken by Australia’s financial intelligence agency, AUSTRAC, to eliminate scammers.
Inactive registered crypto exchanges have been told by Australia’s financial intelligence agency to withdraw their registrations or face cancellation, due to concerns that dormant firms could be used for scams.
Currently, 427 crypto exchanges are registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC), but it was stated by the agency on April 29 that a significant number are suspected to be inactive and potentially vulnerable to being acquired and co-opted by criminals.
Any so-called digital currency exchanges (DCEs) that appear to no longer be trading are being contacted by the agency, and it was stated by AUSTRAC CEO Brendan Thomas that they will be instructed to “use it or lose it.”
It was added by him that businesses registered with AUSTRAC are required to keep their details updated, including information about services that are no longer provided.
Businesses that wish to offer conversions between cash and crypto to Australians, including crypto ATM providers, must first be registered with AUSTRAC, which monitors crimes such as money laundering, terror financing, and tax evasion.
A registration can be canceled by the agency if reasonable grounds exist to believe that the business is no longer active or offering crypto-related services.
Since 2019, the AUSTRAC registration of ten firms has been canceled, with the most recent being FTX Express in June 2024, the local subsidiary of the collapsed crypto exchange FTX.
Following its blitz on inactive crypto exchanges, it was stated by AUSTRAC that a list of registered exchanges will be published to assist Australians in verifying legitimate providers.
It was stated by Thomas that the goal is to make it more difficult for criminals to scam people and to improve the integrity and accuracy of AUSTRAC’s register.
It was said by him that if a DCE intends to offer a service, contact must be made with us, otherwise the registration will be canceled and this information will be added to the register.
It was added by Thomas that members of the public should feel confident in identifying legitimate cryptocurrency providers that are registered and subject to regulatory oversight, and that criminals are being driven out of the industry by us.
In February, action was taken by the Anti-Money Laundering regulator against 13 remittance service providers and crypto exchanges, with over 50 others still under investigation for possible compliance issues.
Registration renewal was refused for six providers on the grounds that key personnel had been convicted, prosecuted, or charged with a serious offense.
Crypto regulations have yet to be passed by Australia. In August 2022, a series of industry consultations were initiated by the ruling center-left Labor Party to draft a crypto regulatory framework.
In March, a new crypto framework was proposed by the government, aiming to regulate exchanges under existing financial services laws ahead of the federal election scheduled for May 3.
