AUSTRAC Cracks Down on Inactive Digital Currency Exchanges to Protect Consumers and Combat Crime
In a bid to enhance security and curb criminal activity in the rapidly growing digital currency market, AUSTRAC, Australia’s financial intelligence agency, has issued a stark warning to inactive digital currency exchange (DCE) businesses. The agency is urging those businesses to voluntarily withdraw their registrations or risk having them cancelled.
Registration Mandatory for Cryptocurrency Services
DCEs, which include businesses providing cryptocurrency exchange services—such as cryptocurrency ATM providers—must be registered with AUSTRAC before offering any services that exchange cash for cryptocurrency, or vice versa. As of now, Australia is home to 427 registered DCEs. However, a significant number of these are believed to be inactive, prompting AUSTRAC’s call for action.
CEO’s Warning: Inactive DCEs Could Be Vulnerable to Criminal Activity
In a recent statement, AUSTRAC CEO Brendan Thomas highlighted the risks posed by inactive DCEs in a high-risk sector. “Businesses offering cryptocurrency exchange services operate in a high-risk environment, and AUSTRAC registration offers legitimacy,” Thomas said. “Inactive businesses, however, become prime targets for criminals looking to launder money or carry out scams.”
AUSTRAC’s intelligence indicates that cryptocurrency platforms are increasingly being exploited by criminals for money laundering, scams, and other illicit activities. According to Thomas, such criminal behaviour poses a serious threat to consumers and the broader financial system.
The Need for Clean Up
As part of the initiative, AUSTRAC is reaching out to any DCEs that appear to no longer be trading. Businesses that fail to maintain their registration or provide accurate information will face cancellation. “If a DCE no longer intends to offer services, they need to inform us, or we will cancel their registration,” Thomas warned. “Our aim is to protect consumers and ensure that only active and legitimate services are included in the DCE register.”
What DCEs Must Do
For DCEs that intend to continue operations, AUSTRAC insists on keeping their registration details up to date. If any DCE’s circumstances change, they are encouraged to contact AUSTRAC immediately.
“If a business is re-entering the market after being inactive, it can always apply for a new registration,” Thomas explained.
A New Public Register to Boost Transparency
In the wake of this crackdown, AUSTRAC is also planning to introduce a publicly accessible DCE register, making it easier for the public to verify whether a digital currency exchange is registered and regulated. The searchable database will allow consumers to confidently identify legitimate service providers and avoid falling victim to scams or unregulated platforms.
“We want the public to feel assured that they can easily identify cryptocurrency providers that are legally registered and comply with Australian regulations,” Thomas said. “This register will help drive criminals out of the industry and improve transparency.”
A Step Toward Safer Cryptocurrency Transactions
The crackdown comes as AUSTRAC works to further regulate the cryptocurrency sector, ensuring businesses maintain proper registration and compliance. By focusing on inactive exchanges and improving public access to registration information, AUSTRAC is taking decisive steps to protect Australian consumers and prevent illicit activities within the growing digital currency market.
As the industry continues to evolve, the upcoming publicly searchable register is expected to play a key role in bolstering consumer confidence and safeguarding the financial system from the dangers posed by unregulated digital currency platforms.
