Monday, 13 July 2020

'Let this be a warning': Watchdog suspends cryptocurrency exchanges

The anti-money-laundering watchdog says it has suspended the licences of two cryptocurrency exchanges after a police investigation found the businesses were being exploited for drug trafficking.

It is 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.

A recent study revealed the value of cryptocurrencies stolen from exchanges and scammed from investors surged more than 400 per cent in 2018 to about $US1.7 billion ($2.4 billion).

In a joint statement with Austrac on Friday, the Australian Federal Police (AFP) said they had arrested a 27-year-old man, a "key member" of the suspended cryptocurrency businesses, and charged him with importing, trafficking and possessing about 30kg of drugs including cocaine.

The man is suspected of playing a major 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, police said.

"While cash is still 'king', digital currencies are fast becoming the preferred choice for organised criminal networks involved in money laundering, funding terrorism and cybercrimes," Cybercrime Squad commander Detective Superintendent Matt Craft said in a press release.

"Let this be a warning to digital currency exchange providers: if you fail to comply with your obligations, your actions will not go unnoticed."

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