A joint press release issued by NSW Police Force and AUSTRAC has issued a stark warning to crypto exchanges in Australia. AUSTRAC, the country’s money laundering and counter terrorism financing watchdog, wants exchanges to be aware of their obligations following amendments to Commonwealth legislation last year. Those obligations are set out here.
The amendments included crypto exchanges registering with AUSTRAC, verifying customer identity, reporting suspicious matters and over-threshold cash transactions; and complying with record-keeping requirements.
“Digital currency exchange providers have had adequate time and opportunity to comply with these new laws,” said Dr Nathan Newman, AUSTRAC National Manager for Regulatory Operations. “It’s important that [they] meet their obligations so we can identify any instances of criminal activity using their services to launder money, fund terrorism or commit other serious crimes”.
If You Fail To Comply, Your Actions Will Not Go Unnoticed
AUSTRAC has already refused the registration of two cryptocurrency exchanges for their alleged links to an organised crime syndicate. The shutdown of the exchanges followed the arrest of a 27-year-old Melbourne man by the Australian Federal Police (AFP) on drug trafficking offences. Police allege that the man was involved in directing operations of the syndicate, which “used various dark net sites, bitcoin accounts and legitimate business for the sourcing, payment and distribution of the illicit drugs”.
AUSTRAC removed the registration of the exchanges after discovering that the arrested man was a “key member” within the companies. They want to remove their “ability to continue to conduct business”.
“AUSTRAC’s role is to deter and disrupt criminal exploitation of Australia’s financial system and we take swift action where there is a reasonable risk of compromise,” said Dr Newman. “Our decision to suspend the registration of the two businesses means they can no longer lawfully operate”.
A Timely Reminder
Cybercrime Squad Commander, Detective Superintendent Matt Craft, said this is a timely reminder to those who deal in digital currencies to ensure they are meeting their obligations.
“Let this be a warning to digital currency exchange providers, if you fail to comply with your obligations, your actions will not go unnoticed”. He added: “Given the perceived anonymity of the Dark Net, Australian criminal groups are starting to favour the online environment to conduct illicit business. With police and our partners proactively targeting this space, I’ll assure these networks that their anonymity is no longer guaranteed”.