Australia’s financial intelligence agency AUSTRAC is calling on inactive digital currency exchanges to voluntarily withdraw their registrations or risk having them canceled.
The move comes as part of a regulatory blitz aimed at cleaning up the cryptocurrency sector and preventing criminal exploitation of dormant exchange licenses. According to AUSTRAC CEO Brendan Thomas, the agency is concerned that a significant portion of the currently registered digital currency exchanges (DCEs) are no longer actively trading.
Australia’s AUSTRAC is concerned about inactive exchanges
AUSTRAC considers cryptocurrency exchanges to be operating in a high-risk sector that requires ongoing regulatory oversight. The financial intelligence agency is particularly concerned about inactive registered exchanges becoming targets for criminal acquisition and misuse.
Registered businesses that have stopped providing digital currency exchange services remain on AUSTRAC’s register. This may be a chance for abuse. The agency’s intelligence is that cryptocurrency can be used by criminals for money laundering, scams, and money mule activity.
The regulatory body has seen increasing numbers of digital currency scams targeting individuals, making the need for remedial action all the more pressing. By disclosing the inactive registrations, AUSTRAC is trying to instill consumer confidence in its regulation system. It also wants to try to reduce potential harm from occurring to the Australian public.
Under the current laws, all businesses providing the service of exchanging cash for cryptocurrency or vice versa must have an active registration with AUSTRAC before they are allowed to legally operate. This means gaps in legislation cover cryptocurrency ATM operators.
The agency can cancel a registration where there are reasonable grounds to believe that the person or entity is no longer providing DCE services. When cancelling registrations, this is published on the website of AUSTRAC.
‘Use It or Lose It’ approach to registrations
AUSTRAC is taking a use it or lose it approach to digital currency exchange registrations to improve its register. The agency is contacting exchanges that it suspects are inactive, telling them to either inform AUSTRAC they are no longer in business or lose their registrations.
If they are registered with the regulator, they have obligations in law to keep that information up to date. That would include information in relation to services they are no longer providing. AUSTRAC can cancel registrations if there are reasonable grounds to believe that a business has ceased being a digital currency exchange.
The regulator indicated that cancellations do not indicate that businesses cannot do business in the future. If conditions were to change, then even a DCE could make a new application to register with AUSTRAC.
AUSTRAC’s actions are an extension of prior actions. In February 2025, the Australian regulator actioned 13 financial institutions that were used for funds transfer and cryptocurrency exchange and identified more than 50 entities that may have been of interest and worthy of further investigation. This was done as part of a 12-month campaign on the violation of non-reporting and under-reporting in the sector.
AUSTRAC notices of warning to non-compliant businesses serve as warnings leading to potential legal intervention. They can be for breaches such as failing to report certain suspicious transactions and activities.
New public registry to improve transparency
After completing its tests for compliance, AUSTRAC wants to establish an open digital currency exchange register that is open to public search.This will allow customers and members of the public to quickly determine if their cryptocurrency exchange is on the regulator’s register.
The public register will make an important contribution to transparency in Australia’s cryptocurrency environment. AUSTRAC aims to have a system where people can quickly assess who is a legitimate cryptocurrency provider and compliant with regulations.
The strategy is to move the agency’s broader mandate to eliminate public confusion regarding what firms are legally able to offer cryptocurrency exchange services. The registry would provide the mechanism to distinguish compliant providers from those outside of regulatory boundaries.
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