Crypto Exchanges Face AUSTRAC Action Over Inactivity

AUSTRAC Targets Dormant Crypto Exchanges Amid Push to Strengthen Consumer Protection and Market Integrity

Australia’s top financial intelligence agency is taking decisive action against inactive cryptocurrency exchanges, as part of its ongoing effort to protect the public from financial crime and improve oversight of the rapidly evolving digital assets sector. The Australian Transaction Reports and Analysis Centre (AUSTRAC) announced on April 29 that it is contacting digital currency exchanges (DCEs) that appear to be dormant, warning them to either formally shut down operations or face removal from the national register.

The move marks a critical moment in Australia’s ongoing push to clean up the crypto sector, which has grown quickly over the last decade but continues to face issues related to fraud, money laundering, and regulatory uncertainty.

AUSTRAC Moves to Tighten Oversight of Crypto Sector

In a statement released this week, AUSTRAC Chief Executive Officer Brendan Thomas said that of the 427 digital currency exchanges currently registered in Australia, a significant portion may no longer be operating. These inactive entities, while not actively conducting business, still maintain a license—making them a potential entry point for criminal activity.

“Use it or lose it,” Thomas said, emphasizing that businesses must actively maintain their registration status or be prepared to forfeit it. “If your platform is no longer providing digital asset services, you need to let us know—or you risk being deregistered.”

Under current Australian law, all crypto exchanges and providers of cryptocurrency ATMs must register with AUSTRAC before conducting business. The agency, which is tasked with identifying and preventing money laundering, terrorism financing, tax evasion, and other forms of financial misconduct, holds the authority to cancel a company's registration if it deems the firm to be inactive or non-compliant.

Since 2019, AUSTRAC has canceled the registration of at least 10 exchanges. Among the most notable was the deregistration of FTX Express, the Australian arm of the now-defunct global cryptocurrency exchange FTX, which was removed from the register in June 2024 after its global collapse.

Dormant Platforms a Target for Criminal Exploitation

AUSTRAC’s latest campaign is not merely a matter of regulatory housekeeping—it is a response to a growing concern that inactive or poorly maintained exchanges could be hijacked by malicious actors. Without the proper controls in place, these dormant licenses can be purchased or otherwise compromised by criminal networks aiming to conduct illicit activities under the guise of a legitimate business.

“These platforms, while inactive, still pose a significant risk if left unattended. They could be bought out and repurposed for money laundering, fraud, or even funding illegal operations,” said Thomas. “Maintaining up-to-date business information is not optional—it is essential to ensuring the integrity of our financial system.”

To address this issue, AUSTRAC is directly contacting firms that appear to have ceased operations, urging them to either resume trading in full compliance with the law or to initiate voluntary deregistration.

Public List of Registered Exchanges to Be Released

In an effort to enhance transparency and support consumer protection, AUSTRAC is also preparing to publish a public list of all registered and active digital currency exchanges operating in Australia. This list will be made available on the agency’s website and updated regularly to reflect the current status of crypto service providers.

The goal is to provide Australians with a clear, authoritative source to verify whether a cryptocurrency platform is operating legally under AUSTRAC’s oversight.

“We want Australians to be able to easily identify legitimate businesses. A public registry will make it more difficult for unregistered or fraudulent platforms to deceive users,” Thomas said. “This is about building trust and improving the overall health of the crypto economy.”

This measure could prove especially important for new investors and retail users, many of whom are entering the crypto space for the first time and may be unaware of the risks associated with unregulated platforms.

Previous Actions and Ongoing Investigations

AUSTRAC’s crackdown on inactive exchanges follows a broader pattern of enforcement efforts across the digital asset and remittance industries. In February 2025, the agency took regulatory action against 13 crypto and money transfer service providers over breaches of compliance obligations. At the same time, it launched investigations into more than 50 additional businesses for potential rule violations.

The agency’s scrutiny has not been limited to company behavior alone. In several cases, AUSTRAC has denied registration renewals to firms whose senior leadership had been charged with or convicted of serious criminal offenses. These actions underscore AUSTRAC’s growing willingness to intervene early in cases where red flags are detected in management or operational structure.

“In cases where a business or its key personnel present an unacceptable risk, we have a responsibility to act swiftly and decisively,” Thomas said. “Crypto innovation is welcome, but it cannot come at the expense of consumer safety or national security.”

A Regulatory Gap Still Waiting to Be Filled

Despite AUSTRAC’s efforts to strengthen the framework around digital currency providers, Australia still lacks comprehensive cryptocurrency-specific legislation. While exchanges are currently required to register with AUSTRAC under anti-money laundering and counter-terrorism financing (AML/CTF) laws, there is no standalone regulatory regime governing the full scope of digital asset services.

In August 2022, the Albanese government began consultations with industry stakeholders on the development of dedicated crypto legislation. These talks have continued over the years but have yet to yield formal law.

In March 2025, just weeks before the upcoming federal election on May 3, the government introduced a proposed framework that would extend certain existing financial services laws to cover digital asset exchanges. The draft policy includes stricter compliance obligations, custody requirements, and governance standards. If passed, it would mark the most significant legislative shift in Australian crypto policy to date.

Industry leaders have welcomed the proposal, viewing it as a critical step toward legitimizing the sector. However, many are urging the government to move quickly, citing the growing risk of consumer harm and market instability in the absence of clear regulations.

What This Means for Consumers and Businesses

For Australian consumers, the outcome of AUSTRAC’s current push is likely to result in greater confidence and protection when transacting with digital asset providers. The public registry will make it easier to avoid scams, while the removal of inactive or suspect entities will help eliminate bad actors from the system.

For businesses, however, the pressure is on. Exchanges that wish to maintain their registration must prove they are active, compliant, and up to date with all regulatory obligations. Failing to do so may result not only in removal from AUSTRAC’s register but also reputational damage and loss of access to financial services infrastructure.

This comes at a time when the crypto industry is facing growing scrutiny from regulators worldwide. In the United States, the Securities and Exchange Commission (SEC) has launched multiple enforcement actions against high-profile exchanges. The European Union, meanwhile, has introduced the Markets in Crypto-Assets (MiCA) regulation to standardize crypto laws across the bloc.

Australia’s latest enforcement measures place it squarely among countries actively seeking to balance innovation with accountability.

Final Thoughts

As the cryptocurrency sector continues to mature, the role of regulators such as AUSTRAC is becoming increasingly critical. By proactively identifying and removing dormant exchanges, the agency is not only protecting consumers from fraud but also reinforcing the legitimacy of the broader digital asset ecosystem.

While comprehensive crypto legislation is still on the horizon, AUSTRAC’s latest actions demonstrate that the government is not waiting passively for laws to catch up. It is taking concrete steps now to ensure that only reputable, functioning businesses are allowed to operate in Australia’s digital finance space.

For the growing number of Australians engaging with crypto, this could mark the beginning of a safer, more transparent future in digital investing and commerce.

Writer @Barland

Barland is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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