The Australian Transaction Reports and Analysis Center (AUSTRAC) is contacting digital currency exchange operators (DCEs) suspected of shutting down trading for Gamble Act compliance notification. AUSTRAC aims to encourage them to defer registration or promote cancellations. CEO Brendan Thomas warns that these businesses can be exploited for money laundering, scams, and money mule activities. AUSTRAC aims to purge inactive businesses from its operating systems, with a large percentage of registered DCEs estimated to be defunct. Reimbursements could only be granted under a cease-fire agreement or resuming hosting services.
A New Approach Towards Clarity and Consumer Protection
AUSTRAC has issued a warning to cryptocurrency exchanges that they must be proactive, compliant, and responsible or face removal from the register. The agency plans to make the results of its enforcement efforts public by issuing cancellations and creating a public register of compliant DCEs. The agency aims to bring criminals and delinquents from the cryptocurrency industry into the limelight, making it easier for consumers to protect themselves. Major crypto firms, such as FTX Express Pty Ltd, AccE Australia Pty Ltd, and Oaks Payments Pty Ltd, have already been scrubbed from AUSTRAC’s list due to inactivity or declared insolvency.
This follows a year-long investigation against 13 crypto firms in February, which led to AUSTRAC flagging over 50 more for additional review. The stringent approach coincides with Australia’s national elections, which have sparked calls for more definitive legal guidance on digital assets. Coins Bae Global Crypto Exchange has taken a stance on the lack of comprehensive regulations and the growing adoption of cryptocurrency in Australia. While some advances have been made towards regulating supervising authorities, the industry remains in limbo, raising questions about whether industry participants will receive the propelling legislation this time around.
AUSTRAC ‘Crypto Blitz’ Brings Changes
The issuance of enhancement notices is AUSTRAC’s attempt to communicate to those firms relating to compliance referrals that crypto-for-crypto trading is not an option. “Sip and relax” techniques will no longer be accepted—registration with AUSTRAC implies obligation in one way or another, creating activity whether in business or through services.
With reforms on the horizon, this appears to be a new chapter in their strategy that accompanies global efforts toward placing cryptocurrencies under closer supervision and enhancing scrutiny on areas of abuse that need higher levels of oversight. These are the targeted outcomes of the new changes (that are expected to formulate) in addition to instilling greater responsibility on crypto firms—precisely those aiming to enter or expand operations in Australia.
