Australia cracks down on inactive crypto exchanges to fight financial crime

Australia will crack down on inactive cryptocurrency exchanges over concerns they could be exploited by criminals for scams and money laundering. According to the Australian Transaction Reports and Analysis Centre (AUSTRAC), a growing number of registered digital currency exchanges (DCEs) appear to be dormant, yet remain on the official register. The agency has now begun contacting these entities, warning them to either update their operational status or face deregistration, an April 29 announcement said. Why is Australia cracking down on inactive crypto exchanges? In a statement issued on April 29, AUSTRAC said the campaign is part of a broader effort to clean up the sector and ensure its official register accurately reflects legitimate and active providers. The agency said there are currently 427 registered DCEs in Australia, but a “significant proportion” may no longer be offering crypto services. Brendan Thomas, CEO of AUSTRAC, believes inactive registrations present a serious risk, as they can be purchased and repurposed by bad actors. “Because AUSTRAC registration provides legitimacy,” he said, “businesses that are no longer operating are vulnerable to being bought and co-opted by criminals.” All digital currency exchanges in Australia, including crypto ATM operators, are required to register with AUSTRAC before offering services that convert cash to crypto or vice versa. These entities fall under AUSTRAC’s supervision as part of the country’s anti-money laundering and counter-terrorism financing framework. According to Thomas, registered businesses are mandated to keep their details up to date, including information on services they no longer provide. Failing to do so, he warned, could lead to their registration being cancelled. “We’re aiming to protect consumer confidence in AUSTRAC registration and limit the potential for improper sale and use of DCE businesses,” he said. The agency said it has the authority to cancel a registration if there are reasonable grounds to believe that a business is no longer operating. These cancellations are recorded and publicly listed on AUSTRAC’s website. Since 2019, ten DCE registrations have been cancelled, including FTX Express, the Australian arm of the now-defunct FTX exchange, which lost its registration in June 2024. AUSTRAC also plans to launch a publicly searchable register of active DCEs, allowing consumers to check whether a provider is officially licensed and subject to regulatory oversight. The goal, according to Thomas, is to prevent users from being misled about the services a business is authorised to offer. “Our intelligence shows cryptocurrency can be exploited by criminals for money laundering, scams, and money mule activities,” Thomas noted, adding that too many people are falling victim to fraud involving digital currencies. The current effort, he said, is about improving the accuracy of the national register while “driving criminals out of this industry.” Australia to regulate the crypto sector As previously reported by Invezz, Australia is also working on a wider regulatory framework for crypto. In March, the Treasury released a roadmap focused on tokenisation, real-world assets, and wholesale CBDCs. The plan includes pilot programs testing tokenised money, such as stablecoins, for settling wholesale transactions. These trials aim to boost efficiency and reduce reliance on intermediaries. Lawmakers also plan on introducing a licensing system for crypto exchanges. Under the new framework, platforms must meet financial service standards and use third-party custodians for user assets. To tackle de-banking, the framework aims to give licensed crypto firms better access to traditional banking. Officials believe clearer rules will help build trust between banks and digital asset businesses. The post Australia cracks down on inactive crypto exchanges to fight financial crime appeared first on Invezz

Source: Invezz