Source: Cointelegraph
Original: “Australia's financial regulator to crack down on dormant cryptocurrency exchanges”
The Australian financial intelligence agency AUSTRAC has notified dormant registered cryptocurrency exchanges to withdraw their registration or face the risk of cancellation, due to concerns that these inactive companies may be used for fraud.
Currently, there are 427 cryptocurrency exchanges registered with 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 reaching out to those so-called digital currency exchanges (DCEs) that appear to no longer be trading, with AUSTRAC CEO Brendan Thomas stating that they will be informed to "use it or lose it."
He added, "Businesses registered with AUSTRAC need to keep their information up to date, including information about services that are no longer offered."
Businesses hoping to provide cash-to-cryptocurrency conversion services in Australia, including cryptocurrency ATM providers, must first register with AUSTRAC, which 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If AUSTRAC has reasonable grounds to believe that a business is no longer active or is no longer providing cryptocurrency-related services, it can cancel its registration.
Since 2019, a total of 10 companies have had their AUSTRAC registration canceled, the most recent being FTX Express in June 2024, which is the local subsidiary of the bankrupt cryptocurrency exchange FTX.
Following a concentrated crackdown on dormant cryptocurrency exchanges, AUSTRAC stated 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 enhance the integrity and accuracy of AUSTRAC registrations.
"If a digital currency exchange (DCE) truly intends to provide services, they need to contact us; otherwise, we will cancel their registration and add that information to the registry," he said.
"The public should have confidence in identifying registered and regulated legitimate cryptocurrency providers, and we are expelling criminals from the industry," Thomas added.
In February, the anti-money laundering regulator took action against 13 remittance service providers and cryptocurrency exchanges, with over 50 others 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 yet to pass cryptocurrency regulations. In August 2022, the ruling center-left Labor Party initiated a series of industry consultations to draft a cryptocurrency regulatory framework.
In March, the government proposed a new cryptocurrency framework, planning to regulate exchanges under existing financial services laws, expected to be implemented before the federal election on May 3.
Related: "Crazy Operations": Nordic countries' tax "blacklist" jeopardizes the safety of cryptocurrency holders.
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