Australia Shuts Down Two Crypto Exchanges for Links with Organized Criminal Groups

The Financial Intelligence Agency of Australia (AUSTRAC) has ordered halting operations of two crypto exchanges which are allegedly found to have links with organized criminal groups in the country. The suspension came close on the heels of an arrest of a 27-year old person who is allegedly operating the crypto exchanges, reported ComputerWorld.

The federal police of Australia discovered these crime rings back in 2017 and arrested two Victorian men who were allegedly involved in the menace of the drug importation. After interrogating these criminals, police came to know about a wider network of drugs importation through the postal system; indicating the involvement of many other people in this nexus. The recent arrest of the 27-year old person is unraveling many threads in this illegal drugs business with police claiming that the arrested person acted as a key resource for the mobilization of funds for these activities. The person is alleged to have played an important role to provide criminal elements access to legitimate business accounts for illicit drugs distribution.

It is yet to be investigated whether these cryptocurrency exchanges were aware of these illicit operations or not. These arrests and shutdown of the operations of two cryptocurrency exchanges are also serving as a reminder for other crypto exchanges in Australia that they need to be cautious about their operations and apprise authorities about any illegal activity they notice on their platform. This has been made mandatory by the Anti-money laundering and Counter-Terrorism Financing Act that has come into force in April 2018 last year. According to the provisions of this law, cryptocurrency exchanges have to register with AUSTRAC, need to verify the identity of their customers, and immediately report any suspicious activity to the regulating authority.

Emphasizing compliance, Nathan Newman who is the National Manager for Regulatory Operations at AUSTRAC said that cryptocurrency exchanges should not make any kind of excuse that they haven’t got enough time to report the matter to the authorities in case of any suspicious transaction. He further elaborated that the exchanges have enough time to comply with the new regulations and they have already refused licenses to two crypto exchanges on the grounds of non-compliance.

Newman strongly advocated that collaboration between the cryptocurrency exchanges and the regulatory agencies are required to provide a conducive environment for the growth of digital currencies in the country. It is also required to make the crypto environment free from crime and stop illicit activities like money laundering and terror financing that can potentially misuse the exchanges for their criminal motives.

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