AUSTRAC Issues $75,120 Infringement Notice to Cointree for Compliance Failures
On May 19, 2025, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced it has issued a $75,120 infringement notice to Cointree Pty Ltd, a digital currency exchange, for failing to submit suspicious matter reports (SMRs) within the legally required timeframes. This action comes in the wake of Cointree’s self-disclosure to AUSTRAC regarding its compliance shortcomings under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
Background on Compliance Obligations
According to AUSTRAC, businesses regulated under the AML/CTF Act are mandated to report any suspicious activities within set deadlines. Specifically, SMRs relating to potential money laundering must be submitted within three business days, while reports concerning suspected terrorism financing require submission within 24 hours. Timely communication of such reports is crucial, as it allows AUSTRAC and law enforcement agencies to respond appropriately and effectively to potential threats.
AUSTRAC CEO Brendan Thomas emphasized the importance of this compliance requirement, pointing out that delays in submitting SMRs hinder the organization’s ability to act on critical information. "In this case, Cointree has fully co-operated with AUSTRAC in self-disclosing the breaches and is taking proactive steps to remediate its systems and controls to ensure future compliance," Thomas stated. He added that, without such cooperation, Cointree could have faced a more severe regulatory response.
Cointree’s Response
Cointree has acknowledged its reporting failures and has taken steps to address the issues, working closely with AUSTRAC to improve its compliance systems. "The company has paid the infringement notice in full. However, AUSTRAC has clarified that this payment does not imply an admission of liability, and this action effectively concludes the matter," Thomas noted.
Broader Implications for the Crypto Industry
This incident follows AUSTRAC’s earlier warnings about the vulnerabilities associated with the digital currency exchange (DCE) sector. In a national risk assessment released in 2024, AUSTRAC highlighted that the DCE sector is particularly susceptible to money laundering activities, attributed to its rapid transaction capabilities, global reach, and the pseudonymous nature of cryptocurrencies.
The regulator’s actions underline the increasing scrutiny of digital currency platforms regarding their compliance with anti-money laundering regulations. Industry stakeholders may view this as a wake-up call to ensure that their practices align more closely with regulatory requirements to avoid similar penalties.
Conclusion
As regulatory frameworks around cryptocurrencies continue to evolve, the emphasis on compliance has never been more critical. Cointree’s infringement notice serves as a reminder to all players in the crypto exchange realm of their obligations under Australian law. Ensuring compliance not only fosters trust within the financial ecosystem but also enhances the overall integrity of the digital currency sector.
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