AUSTRAC to Axe Inactive Digital Currency Exchange Firms

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has asked inactive digital currency exchange (DCE) firms to withdraw their registrations or risk having them canceled. This “Use it or Lose it” campaign would also affect crypto ATM providers, according to the AUSTRAC’s official announcement.

AUSTRAC Identified Many Inactive DCEs

For context, all DCEs must be registered with the AUSTRAC before being allowed to offer exchange services. As of the time of this writing, there are 427 registered DCEs, although not all of them are active.

The AUSTRAC expressed concern with the number of inactive firms and announced that it will be contacting all DCEs that are no longer trading. The center justified its decision with the high-risk nature of the sector these firms are operating in. Since active AUSTRAC registration legitimizes such firms, inactive businesses could be potentially bought and exploited by criminals.

Brendan Thomas, AUSTRAC’s chief executive officer, elaborated that DCE firms registered with the center should keep their details updated, even about services that are no longer provided. The CEO confirmed that the recent action seeks to prevent the DCE sector from being exploited by bad actors.

Use It or Lose It

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.

Brendan Thomas, CEO, AUSTRAC

Thomas asserted that canceling the registrations of inactive DCE businesses will reduce these weak points and make it harder for criminals to use currency exchange services to launder their illicit proceeds.

At the same time, the campaign will improve the integrity and accuracy of AUSTRAC’s register.

For context, the AUSTRAC can always cancel a registration when it has “reasonable grounds to believe the person or business is no longer carrying on a business that provides a DCE service.”

Because of this, the AUSTRAC encouraged inactive firms to contact it to cancel their registrations. The body reassured them that they could always re-apply for a new registration, should circumstances change.

AUSTRAC to Establish DCE Register

In addition to cracking down on inactive DCE services, the AUSTRAC plans to create a publicly searchable DCE register where citizens would be able to verify whether a service is legit.

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.

Brendan Thomas, CEO, AUSTRAC

In the meantime, registration cancelations will continue to be published on the AUSTRAC’s official website.