Australia’s Financial Watchdog Cracks Down on Dormant Crypto Exchanges
AUSTRAC Initiates Action Against Inactive Digital Currency Providers
Australia’s financial intelligence agency, the Australian Transaction Reports and Analysis Centre (AUSTRAC), has launched a significant crackdown on dormant cryptocurrency exchanges. The initiative aims to mitigate the potential exploitation of inactive exchanges by fraudsters looking to perpetrate scams. This move comes amidst growing concerns regarding the security and integrity of the country’s burgeoning cryptocurrency landscape.
Targeting Inactive Firms
As part of this enforcement effort, AUSTRAC has reported that it is reaching out to registered crypto exchanges that have shown signs of inactivity. Currently, there are 427 recognized crypto exchanges registered with AUSTRAC, but the agency suspects that a substantial number of these may not be operational. AUSTRAC CEO Brendan Thomas noted that these dormant firms pose a risk of being acquired and misused by criminal elements.
Thomas emphasized, “Businesses registered with AUSTRAC are required to keep their details up to date; this includes details about services that are no longer provided.” Entities identified as inactive will be given an ultimatum — either resume activity or face the cancellation of their registration.
Importance of Registration
To maintain transparency and consumer protection, businesses seeking to provide services such as cash-to-crypto conversions or operate crypto ATMs must first register with AUSTRAC. This agency functions as a regulatory body, monitoring for potential criminal activities, including money laundering, terrorism financing, and tax evasion.
If AUSTRAC has reasonable grounds to believe that a cryptocurrency business is not currently active or providing related services, it reserves the right to cancel its registration. Since 2019, AUSTRAC has annulled the registrations of ten exchanges, with the latest being FTX Express, a local subsidiary of the defunct crypto exchange FTX, which had its registration revoked in June 2024. ### Public Transparency Initiative
In an effort to bolster public confidence and assist users in identifying legitimate cryptocurrency providers, AUSTRAC plans to publish a public list of registered exchanges. This development is part of the agency’s broader strategy to enhance the integrity and accuracy of its registry.
“We are driving criminals out of this industry," Thomas stated, advocating for a robust verification system that allows Australians to easily distinguish legitimate providers from potential scams. He reiterated that any exchange intending to offer services must maintain communication with AUSTRAC or risk losing its registration status.
Regulatory Landscape and Industry Oversight
The move to eradicate dormant crypto exchanges aligns with AUSTRAC’s earlier actions in February, where it targeted thirteen remittance service providers and crypto exchanges, inciting investigations into over fifty others for compliance issues. Some organizations faced denied registration renewal when key personnel had histories of serious offenses.
As of now, Australia has not enacted comprehensive cryptocurrency regulations. However, discussions commenced in August 2022, led by the ruling center-left Labor Party, aimed at developing a regulatory framework. A new proposal introduced in March suggests regulating exchanges under existing financial services laws in anticipation of the federal election scheduled for May 3. ### Conclusion
AUSTRAC’s proactive measures serve not only to protect consumers but also to ensure that Australia’s cryptocurrency ecosystem evolves in a secure and regulated manner. As the agency enhances its oversight and accountability mechanisms, the aim remains clear: to cultivate a safer environment for cryptocurrency transactions while thwarting illicit activities associated with dormant exchanges.
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