Australia's financial regulator will take stock of idle cryptocurrency exchanges

Source: Cointelegraph Original text: "Australian financial regulators will inspect idle cryptocurrency exchanges"

Australia's financial intelligence agency AUSTRAC has notified inactive registered cryptocurrency exchanges to withdraw their registration, or face the risk of having their registration canceled, due to concerns that these inactive companies may be used for fraud.

Currently, there are 427 cryptocurrency exchanges registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC), but the agency stated on April 29 that it suspects a significant number of these exchanges are inactive and may be vulnerable to acquisition and exploitation by criminals.

The agency is contacting those so-called digital currency exchanges (DCEs) that seem to no longer be trading, AUSTRAC CEO Brendan Thomas stated, and they will be told "use it or lose it."

He added, "Businesses registered with AUSTRAC need to keep their information up to date, including information related to services that are no longer provided."

Businesses wishing to provide cash and cryptocurrency conversion services for Australians, including cryptocurrency ATM providers, must first register with AUSTRAC, the agency that monitors criminal activities such as money laundering, terrorist financing, and tax evasion.

If AUSTRAC has reasonable grounds to believe that a business is no longer active or is no longer providing services related to cryptocurrency, it may cancel its registration.

Since 2019, a total of 10 companies have had their AUSTRAC registrations canceled, the most recent being FTX Express in June 2024, which is the local subsidiary of the bankrupt crypto exchange FTX.

After a centralized audit of idle cryptocurrency exchanges, AUSTRAC stated that it will publish a list of registered exchanges to help Australians verify legitimate providers.

Thomas stated that the goal is to make it more difficult for criminals to defraud others and to improve the integrity and accuracy of AUSTRAC registrations.

"If a certain digital currency exchange (DCE) indeed intends to provide services, they need to contact us; otherwise, we will cancel the registration and add that information to the registry," he said.

"The public should have confidence in their ability to identify registered and regulated legitimate cryptocurrency providers, and we are expelling criminals from the industry," Thomas added.

In February, anti-money laundering regulators took action against 13 remittance service providers and cryptocurrency exchanges, while over 50 others are still under investigation for potential compliance issues.

Six providers were denied renewal of registration due to key personnel being convicted, prosecuted, or facing serious charges.

Australia has not yet passed cryptocurrency regulations. In August 2022, the ruling center-left Labor Party launched a series of industry consultations to draft a cryptocurrency regulatory framework.

In March, the government proposed a new cryptocurrency framework aimed at regulating exchanges under existing financial services laws, expected to be implemented before the federal elections on May 3.

Related Articles: "Crazy Operations": Nordic Countries' Tax "Blacklist" Threatens the Safety of Cryptocurrency Holders