Published: Mon, March 11, 2019
Money | By Ralph Mccoy

Australian Regulators Warn Crypto Exchanges Against Infringing Reporting Obligations

Australian Regulators Warn Crypto Exchanges Against Infringing Reporting Obligations

Reports revealed that the key member of these platform has been allegedly charged for possessing nearly 30 kilograms of drugs - including cocaine, ketamine, MDMA, and methamphetamine.

It's unclear at this stage how clients of the exchanges will be affected.

Police in Australia recently arrested a man for using cryptocurrency for selling narcotics, and two cryptocurrency exchanges he was associated with were shut down.

"Digital currency 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", he said.

The 27 year-old was subsequently arrested and charged for allegedly importing, trafficking, and possessing a total of approximately 30 kilograms of drugs. The AFP said following those arrests it continued its investigation into the import of illicit drugs via mail, leading to a series of raids carried out yesterday.

The investigation dates back to 2017 when the AFP had arrested two Victorian men for importing drugs to Australia.

AFP officers executed search warrants in the Melbourne suburbs of Bulleen, Templestowe Lower and Malvern, seizing Australian currency and cryptocurrency related items, as well as steroids.

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Authorities say the cohort used various "dark net sites, Bitcoin accounts, and legitimate business" in order to source and distribute the illegal drugs. The authorities arrested two men in connection with the same. The case has been undertaken by Federal Police in association with AUSTRAC - eventually, with the court order, the police restrained the cryptocurrency, property, and cash more than AU$ 2M. AUSTRAC's Dr. Nathan Newman, the organization's National Manager of Regulatory Operations, said that they would be suspended until further notice.

Separately today AUSTRAC and NSW Police warned digital currency exchanges to be aware of their obligations under federal anti-money laundering rules.

"[Our] role is to deter and disrupt criminal exploitation of Australia's financial system and we take swift action where we there is a reasonable risk of compromise", said one spokesperson.

Past year the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 was amended to bring cryptocurrency within its scope.

Some of the primary changes include verifying customer identity, registering with AUSTRAC, complying with record-keeping requirements, and also reporting over-threshold cash transactions and suspicious matters.

Following the arrests, AUSTRAC suspended the registration of two digital currency exchange businesses where the man was a key member, removing their ability to continue to conduct business. There remains a possibility that the accused used these exchanges to facilitate crypto payments for drug trafficking.

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