AUSTRAC Tells Dormant Crypto Exchanges to Cancel Licences Over Fraud Risk
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The Australian Transaction Reports and Analysis Centre (AUSTRAC) has told inactive registered crypto exchanges to withdraw their registrations or risk having them canceled. The agency is concerned that dormant exchanges could be used for scams or illegal activity.
Crypto Fraud Fight Intensifies as 95 Crypto Platforms Shut Down
According to a caution notice on April 29, all digital currency exchanges (DCEs) must be registered with AUSTRAC.
This registration is required before they can legally offer services that let people exchange cash for cryptocurrency or vice versa.
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There are currently 427 crypto exchanges officially registered in Australia. But not all are active.
AUSTRAC believes these inactive platforms could be hijacked for crypto fraud and criminal activity.
Brendan Thomas, CEO of AUSTRAC, stated that bad actors could easily use these dormant crypto exchanges as vehicles for fraud, scams, or illegal money movement.
The agency’s intelligence backs this concern. It shows that criminals increasingly exploit crypto exchanges for money laundering and scam operations.
There is also an alarm for so-called money mule networks, where victims unknowingly transfer funds on behalf of fraudsters.
AUSTRAC’s message is clear: use your registration or lose it. Australia’s financial regulator also stressed that registrations could be canceled if a business is no longer active.
The agency’s announcement follows a recent crackdown by the Australian Securities and Investments Commission (ASIC), another key regulator in the country.
ASIC secured Federal Court orders to shut down 95 companies. These companies were linked to various investment scams.
Investigation revealed that many of these companies had been incorporated using stolen or fake identities. Some even mimicked legitimate platforms offering services in foreign exchange, commodities, and crypto assets.
Together, AUSTRAC and ASIC are drawing a clear line in the sand: Crypto exchanges that don’t operate transparently, or at all, will not be tolerated.
Are Global Regulators Finally Closing the Gaps in Crypto Oversight?
Australia’s regulators are not the only ones clamping down on crypto fraud. Similar effort is ongoing in other countries
On April 11, South Korea’s Financial Services Commission (FSC) announced the removal of 14 unregistered crypto exchange apps from the Apple App Store. The apps included that of KuCoin and MEXC, which the FSC said were operating illegally because they had failed to register as virtual asset service providers.
The sanction for such an oversight is up to five years in prison and fines of 50 million Korean won (approximately $35,200).
The country’s Financial Information Analysis Institution (FIU) also said it would continue restricting similar unlicensed crypto exchanges to prevent crypto fraud and investor losses.
Meanwhile, the United States is facing a surge in crypto crime.
According to the FBI’s Internet Crime Complaint Center (IC3), crypto fraud in the U.S. rose by more than 66% last year.
In 2024, crypto losses climbed from $5.6 billion to over $9 billion, with over 140,000 crypto-related complaints filed. About 33,000 of these complaints came from victims aged 60 and above, who lost $2.8 billion together.
This wave of crypto fraud across borders is exactly what Australia’s financial regulators and South Korean financial watchdog are trying to prevent.
Their coordinated efforts reflect a growing global consensus: Regulatory inaction only fuels criminal innovation in the crypto space.
