Published: Mon, March 11, 2019
Business | By Eloise Houston

Australia watchdog suspends two cryptocurrency exchanges for drug offences

Australia watchdog suspends two cryptocurrency exchanges for drug offences

Purportedly, he has been charged with the possession of approximately 30 kilograms of drugs, including ketamine, cocaine, MDMA, and methamphetamine, as well as for its importing and trafficking.

It was the first such suspension by the Australian Transaction Reports and Analysis Centre, or AUSTRAC, since new legislation in April 2018 brought digital currency exchanges under its umbrella to ensure cryptocurrencies were monitored the same way as cash exchanges and transfers.

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 initial phase of the investigation led to two men being charged for drug trafficking offences in October 2017.

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.

Police will allege in court that the 27-year-old played a key role in directing the operations of the criminal syndicate, which used various dark net sites, bitcoin accounts and legitimate business for the sourcing, payment and distribution of the illicit drugs.

A separate taskforce also sought to seize related assets.

"Investigations such as this are inherently complex and the operational results achieved by the investigative team are a testament to good police work and strong interagency cooperation". 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.

What do you think of the actions of the Australian Federal Police and AUSTRAC?

Dr. Newman said that they had given enough time and opportunity to cryptocurrency exchanges to comply with their amended Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

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. 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.

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.

Overall, it seems that the criminal syndicate was probably using the cryptocurrency exchanges to launder money in order to facilitate narcotic sales.

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