Australia's Finance Watchdog Targets Dormant Crypto Exchanges for Crackdown

Australia’s financial intelligence unit has instructed unactive registered cryptocurrency exchanges to either withdraw their registrations or face potential cancellations due to concerns that idle companies might be exploited for fraudulent activities.

Currently, AUSTRAC has 427 cryptocurrency exchanges registered, yet the organization said On April 29, they suspect that a considerable amount might be inactive and potentially at risk of purchased and taken over by criminals .

The agency is contacting any so-called digital currency exchanges (DCEs) that seem to no longer be operational, and AUSTRAC CEO Brendan Thomas stated they will face the directive of "either use it or forfeit it."

"Companies registered with AUSTRAC must ensure their information is current; this encompasses details regarding services they no longer offer," he noted.

Companies aiming to provide Australians with exchanges between cash and cryptocurrency, such as operators of crypto ATMs, are required to initially register with AUSTRAC. This organization keeps an eye out for criminal activities like money laundering, terrorist funding, and tax evasion.

The agency holds the authority to revoke a registration if it possesses substantial reasons to think that the business is no longer operational or ceasing to providecrypto-related services.

Since 2019, ten companies have had their AUSTRAC registrations revoked, with the latest cancellation occurring recently. FTX Express in June 2024 the local branch of the defunct crypto exchange FTX.

AUSTRAC to Release Public List of Registered Exchanges

After its crackdown on dormant cryptocurrency exchanges, AUSTRAC announced that it will release a list of registered platforms to assist Australians in confirming legitimate service providers.

Thomas stated that the aim is to make it more difficult for criminals to defraud individuals and enhance the reliability and precision of AUSTRAC's registry.

"If a DCE plans to provide a service, they must reach out to us; otherwise, we'll cancel their registration and include this information in the registry," he stated.

"Members of the public ought to be assured that they can recognize genuine cryptocurrency service providers who are duly registered and under regulatory supervision, and we are working to expel criminals from this sector," Thomas stated additionally.

Related: Australia's highest court supports Block Earner, rejects ASIC appeal

In February, the anti-money laundering regulatory body took action. Action taken against 13 money transfer service providers and crypto exchanges, with over 50 others still being investigated regarding possible compliance issues.

Six service providers had their registration renewals denied because some of the important staff members were either convicted, prosecuted, or faced charges for a significant crime.

Australia still hasn't enacted cryptocurrency regulations. In August 2022, the governing center-left Labor Party started a sequence of sector discussions to draft a crypto regulatory framework .

In March, the government suggested a fresh cryptographic structure regulating exchanges under existing financial services laws ahead of a federal election slated for May 3.

Magazine: The SEC's reversal on cryptocurrency leaves crucial questions unresolved.