Australia’s financial intelligence agency is cracking down on inactive digital currency exchanges, warning they must either withdraw their registration or risk having it cancelled.The Australian Transaction Reports and Analysis Centre (AUSTRAC) confirmed this week that it has begun contacting digital currency exchange (DCE) operators that appear to no longer be trading.
The agency said the move is intended to ensure the integrity of its registration system and reduce the risk of criminal misuse of dormant crypto exchange businesses.Currently, 427 DCEs are registered with AUSTRAC, but the agency believes many are no longer offering services. Under Australian law, all businesses that exchange digital currency for fiat money, including operators of cryptocurrency ATMs, must be registered with AUSTRAC.
Inactive Exchanges Pose Risks, AUSTRAC Warns
AUSTRAC Chief Executive Brendan Thomas said inactive DCEs present a risk to the sector as they may be vulnerable to takeover by criminal groups. He stressed that the legitimacy conferred by AUSTRAC registration could be exploited if businesses are not actively monitored.
“Businesses registered with AUSTRAC are required to keep their details up to date; this includes details about services that are no longer provided,” Mr Thomas said.
Businesses are legally required to maintain up-to-date information with AUSTRAC, including details about services they have ceased to offer. AUSTRAC has the authority to cancel registrations if it believes a provider is no longer operating as a DCE. These cancellations will be made public on the agency’s website.
Public Register to Increase Transparency
The compliance effort comes ahead of AUSTRAC’s plan to launch a publicly searchable DCE register, allowing individuals to confirm whether a provider is legally registered. The move is part of the agency’s broader effort to curb the misuse of digital currencies in criminal activities such as money laundering and scams.
“Our intelligence shows cryptocurrency can be exploited by criminals for money laundering, scams and money mule activities, and we’re seeing far too many people falling victim to scams involving digital currency,” Thomas said. AUSTRAC is urging inactive DCEs to contact the agency if they plan to resume operations.
Those who do not respond will have their registration revoked but can reapply at a later date if their business circumstances change. The agency said the current compliance initiative is part of a broader strategy to improve regulatory oversight of digital currency providers and protect the public from harm.
