Financial crime watchdog AUSTRAC is targeting crypto exchanges after shutting down several in a compliance blitz

The anti-money laundering regulator (the Australian Transaction Reports and Analysis Centre) said it remains concerned about money laundering risks in the digital currency exchange (DCE) sector and is taking a close look via its Crypto Taskforce established last year.

AUSTRAC says there are 417 digital currency exchanges and 5,112 remittance registrations on its record books.

Since January 2024, AUSTRAC has issued to 106 entities reminders of their obligations, warning them they could face further action.

AUSTRAC CEO Brendan Thomas said the alerts are a warning about concerns that operators may not be reporting suspicious matters and transactions to them.

“Late last year AUSTRAC cancelled, suspended and refused renewals of registration for 9 providers that had failed to meet their obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act,” he said.

“A further two providers had conditions placed on their registrations and are now on notice – a failure to meet these conditions may lead to suspension or cancellation of their registrations.”

Among those AUSTRAC took regulatory action against were:

• Key personnel of Auaisa Trading, Amco Travelling and Exchange, Blue Star Exchange, B-Paywize, W Solution Group, and TSS Farms & Group, were either convicted, prosecuted or charged with a serious offence, or were the subject of legal proceedings in relation to the management of an entity, which reflected adversely on their honesty or integrity.
• DIGI-SEND E-Money, Rootie Technology, and Jinte Net Blockchain were no longer operating a business requiring registration.
• Currencyfair Australia and Currencyfair Ltd failed to meet registration requirements fully within the required time period. They are now registered with conditions.

Another two providers, now in liquidation, Marcus Lim’s Zipmex Australia, and FTX Express, part of the collapsed empire of  Sam Bankman-Fried, who was sentenced to 25 years in jail for fraud, were removed from the Digital Currency Exchange Register .

Thomas said AUSTRAC’s analysis identified systemic non-reporting and under-reporting by remittance and digital currency exchanges.

“Early last year we initiated an investigation to identify and eliminate non-compliant providers and improve the industry’s reporting on suspicious matters,” he said.

“AUSTRAC uses the reports submitted by our reporting entities to generate actionable financial intelligence, which is used by our law enforcement partners in thousands of criminal investigations every year. AUSTRAC’s reporting entities are the front line of defence in detecting criminal activity, which is why it is important for all of them to take their AML/CTF obligations seriously.