Comprehensive Analysis: Australia’s Crackdown on Dormant Crypto Companies
Australia’s financial watchdog is intensifying its efforts to clean up the cryptocurrency landscape by targeting inactive crypto firms that still appear on official records. On Tuesday, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced its decision to remove the registrations of exchanges that have ceased operations but remain on their registry. This move is part of a broader initiative to enhance the integrity of the cryptocurrency market in Australia.
Warning to Inactive Cryptocurrency Exchanges
AUSTRAC has identified a troubling trend among the 427 registered cryptocurrency exchanges in Australia: a significant number of these entities are inactive yet continue to be listed as operational. Brendan Thomas, the Chief Executive Officer of AUSTRAC, issued a stark warning to these dormant exchanges: “Utilize your registration or risk losing it,” he cautioned. The agency suspects that these inactive businesses might be targets for acquisition by criminal enterprises seeking to exploit their existing registrations.
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Under current regulations, any business involved in currency exchange for cryptocurrencies, such as ATM operators, must be registered with AUSTRAC. The agency plays a crucial role in monitoring activities related to money laundering, terrorist financing, and tax evasion within the crypto sector.
AUSTRAC’s Firm Stance on Inactive Registrations
Australia’s anti-money laundering regulatory body, AUSTRAC, has been proactive in its approach, warning dormant cryptocurrency exchanges, including notable names like FTX Express and AccE Australia, about the potential cancellation of their registrations if they remain inactive.
Significant Revocations Since 2019
AUSTRAC has not hesitated to revoke registrations when necessary. In the past five years, ten companies have had their registrations canceled. The most recent action was against FTX Express in June 2024, the Australian branch of the now-defunct global crypto exchange FTX. These cancellations underscore AUSTRAC’s authority to remove companies from their registry if there is sufficient reason to believe they no longer operate or provide crypto services.
Public Registry to Identify Authentic Service Providers
To protect consumers, AUSTRAC is preparing to launch an official list of registered cryptocurrency exchanges. This initiative aims to empower Australians to verify the authenticity of a crypto service before investing their money. Brendan Thomas emphasized, “We are determined to eliminate criminal elements from the industry.” The list is expected to bolster confidence in the crypto sector by making it easier for the public to identify businesses that are genuinely registered and regulated.
Intensified Regulatory Efforts Amid Upcoming Elections
AUSTRAC’s focus on inactive exchanges is part of a larger enforcement effort. Earlier in the year, the agency took action against over a dozen remittance providers and exchanges. It is reported that approximately 50 other businesses are currently being scrutinized for potential regulatory violations.
Additionally, six providers faced renewal denials due to significant legal issues involving their key personnel. This regulatory crackdown coincides with Australia’s ongoing efforts to develop comprehensive crypto regulations. The governing Labor Party initiated dialogue with industry experts in August 2022, and by March this year, the government proposed bringing exchanges under existing financial legislation. These regulatory measures have gained increased significance ahead of the forthcoming federal election scheduled for May 3, highlighting the growing importance of digital currency regulation in Australian politics.
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