Australia’s Financial Agency Suspends Two Crypto Exchanges Following Organized Crime Investigation

Crime, News, Regulation | March 11, 2019 By:

The Australian Transaction Reports and Analysis Center (AUSTRAC), the country’s financial intelligence agency, has suspended the registrations of two cryptocurrency exchanges, removing their ability to continue to conduct business.

The suspension were issued after a 27-year-old Bulleen man was arrested during the second phase of an Australian Federal Police (AFP) investigation into an organized crime syndicate. Last week, AFP officers executed search warrants in the Melbourne suburbs of Bulleen, Templestowe Lower and Malvern that led to the arrest of the Bulleen man, who was charged with importing, trafficking and possessing a total of approximately 30 kilograms of drugs, such as MDMA, cocaine, methamphetamine and ketamine.

The authorities alleged that the suspect played a key role in directing the operations of the criminal syndicate, which used various dark net sites, bitcoin accounts and legitimate business for the sourcing, payment and distribution of the illicit drugs. He is also a key member of the two unnamed digital currency exchange businesses.

AFP Detective Superintendent Paul Hopkins said targeting assets allowed authorities to remove the profit motivation that drives most criminal activity.

“When you take the profit out of crime, you hit offenders where it hurts most. Combined with serious criminal charges attracting long prison sentences, this highlights how trafficking drugs is simply not worth it in the long-run,” Hopkins said. “Investigations such as this are inherently complex and the operational results achieved by the investigative team are a testament to good police work and strong interagency cooperation.”

AUSTRAC reminded crypto exchange providers to be aware of their obligations following amendments to Commonwealth legislation in April 2018, which included expanding the scope of the Act to include regulation of digital currency exchange providers. These changes included registering with AUSTRAC, verifying customer identity, reporting suspicious matters and over-threshold cash transactions, and complying with record-keeping requirements.

Dr Nathan Newman, AUSTRAC National Manager, Regulatory Operations, said that crypto exchange providers have had adequate time and opportunity to comply with these new laws and AUSTRAC has already refused the registration of two digital currency exchange providers.

“It’s important that digital currency exchange providers 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,” Newman said.