AUSTRAC is encouraging inactive digital currency exchange (DCE) businesses to voluntarily withdraw their registrations or risk having it cancelled.
DCEs must be registered with AUSTRAC before they can offer a service to exchange cash for cryptocurrency, or vice versa. This includes cryptocurrency ATM providers.
There are currently 427 registered DCEs but AUSTRAC is concerned that a significant proportion are inactive. AUSTRAC is contacting any DCEs that appear to no longer be trading.
AUSTRAC CEO Brendan Thomas said businesses offering cryptocurrency exchange services are operating in a high risk sector and because AUSTRAC registration provides legitimacy, inactive businesses are vulnerable to being bought and co-opted by criminals.
“Businesses registered with AUSTRAC are required to keep their details up to date; this includes details about services that are no longer provided,” Mr Thomas said.
“We’re aiming to protect consumer confidence in AUSTRAC registration and limit the potential for improper sale and use of DCE businesses.
“Our intelligence shows cryptocurrency can be exploited by criminals for money laundering, scams and money mule activities, and we’re seeing far too many people falling victim to scams involving digital currency.
“The blitz is aimed at limiting harm to our community, making it harder for criminals to launder their money and improving the integrity and accuracy of our register, so we’re urging businesses to ‘use it or lose it’.”
AUSTRAC can cancel a registration where there are reasonable grounds to believe the person or business is no longer carrying on a business that provides a DCE service. Registration cancellations are published on our website.
“If a DCE does intend to offer a service, they need to contact us otherwise we will cancel the registration and this information will be added to the register,” he said.
“If circumstances change, a DCE can always re-apply for a new registration with AUSTRAC.”
Following the blitz, AUSTRAC will establish a publicly searchable DCE register, enabling customers and the public to verify if a DCE is registered with AUSTRAC.
“We want to make sure the public isn’t misled about the services a business is legally allowed to provide.
“Members of the public should feel confident that they can identify legitimate cryptocurrency providers that are registered and subject to regulatory oversight and that we are driving criminals out of this industry.”
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