AUSTRAC Intensifies Crackdown on Crypto and Remittance Providers

AUSTRAC, Australia’s financial watchdog, has taken decisive action against 13 remittance and cryptocurrency providers, signaling a major regulatory crackdown aimed at curbing money laundering and financial crimes. With over 50 more providers under review, the agency is not holding back.

• AUSTRAC targets 13 crypto and remittance providers
• 50+ providers under review
• Conditions imposed on two, registration refused for three
• FTX Express and Zipmex Australia removed from register

Money laundering, the process of making illegally-gained proceeds appear legal, is at the heart of AUSTRAC’s crackdown. Two providers, Currencyfair Australia Pty Ltd and Currencyfair Limited, were slapped with conditional registrations for missing the registration deadline. Meanwhile, three others—Jinte Net Blockchain Pty Ltd, DIGI-SEND E-Money Pty Ltd, and another unnamed entity—had their registrations refused and are no longer operating in Australia. The message is clear: comply or get out.

The insolvency, meaning a company cannot pay its debts, of FTX Express and Zipmex Australia led to their removal from the Digital Currency Exchange Register. Their downfall serves as a reminder that even in the decentralized world of crypto, regulatory compliance is non-negotiable.

AUSTRAC’s CEO, Brendan Thomas, emphasized the crucial role of these companies in combating illegal financial activities, stating,

“Remittance service providers and crypto exchanges are key to detecting and disrupting criminal abuse of the Australian financial system.”

However, some firms have been caught ignoring suspicious transactions for far too long, prompting AUSTRAC to launch legal action against companies like Auaisa Trading Pty Ltd, Amco Travelling and Exchange Pty Ltd, and B-Paywize Pty Ltd. Ignoring the rules isn’t just risky; it’s a surefire way to get booted from the game.

With nearly 417 digital currency exchanges and 5,112 remittance registrations in Australia, the stakes are sky-high. Since January 2024, AUSTRAC has reminded 106 entities of their obligations. The passing of the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 on November 29, 2024, further tightens the screws, extending Australia’s AML/CTF regime to new high-risk services, including digital or virtual assets.

Looking ahead, AUSTRAC plans to keep the heat on, with a special focus on the crypto industry, including the burgeoning sector of crypto ATMs, slated for 2025. As Australia’s Bitcoin ATM network has grown from 67 in August 2022 to over 1,453, the regulatory spotlight is set to intensify. While regulation poses challenges, it’s also an opportunity for the industry to mature and gain trust. In the crypto world, where freedom meets the long arm of the law, it’s a dance of compliance that no one wants to sit out.

This crackdown mirrors a global trend towards stricter regulations in the crypto space. While some might argue it’s an overreach, it’s undeniable that a regulated environment can foster greater trust and stability. At the same time, Bitcoin, with its decentralized nature, continues to stand as a beacon of financial freedom amidst these regulatory pressures. Perhaps these challenges will spur faster innovation and adoption, aligning with the concept of effective accelerationism.

Key Takeaways and Questions

• What actions has AUSTRAC taken against non-compliant crypto and remittance providers?

  AUSTRAC has cracked down on 13 providers, imposing conditions on two, refusing registration to three, and removing two insolvent exchanges from the register.

• Why is reporting suspicious transactions important according to AUSTRAC?

  Reporting suspicious transactions is crucial for generating actionable financial intelligence that helps combat financial crimes.

• What is the current status of FTX Express and Zipmex Australia in Australia?

  Both have been removed from the Digital Currency Exchange Register due to insolvency.

• What are AUSTRAC’s plans for the crypto industry in 2025?

  AUSTRAC plans to intensify its focus on the crypto industry, particularly addressing potential issues with crypto ATMs.

• How many digital currency exchanges and remittance registrations are there in Australia?

  There are nearly 417 digital currency exchanges and 5,112 remittance registrations in Australia.

• How might these regulatory actions affect crypto adoption and innovation in Australia?

  While increased regulation may slow down adoption in the short term, it can also lead to greater trust and stability, potentially fostering more innovation and growth in the long run. The crypto industry, particularly Bitcoin, might adapt by accelerating technological advancements to navigate these regulatory challenges.