Cointree Fined for AML Lapses by AUSTRAC
A Quick Take
Cointree, an Australian Cryptocurrency Exchange, Faced Financial Penalty Due to Late Filing of Suspicious Activity Reports
Australia's financial watchdog, AUSTRAC, has slapped Melbourne-based crypto exchange Cointree with a AUD 75,120 fine for neglecting to submit suspicious transaction reports within the stipulated timeframes.
The watchdog took disciplinary action after Cointree voluntarily revealed its delays in meeting anti-money laundering (AML) reporting obligations, as stated in a communique on Thursday.
These mandatory reports, known as SMRs, come into play when entities suspect transactions may be linked to illicit activities such as money laundering or terrorism financing.
AUSTRAC emphasized that these delayed reports hampered their ability to expedite action on emerging threats.
AUSTRAC's CEO, Brendan Thomas, underscored the urgency of these reports, stating, "We need to act on these reports swiftly, which is why the timeframes are established - they enable us to react promptly to suspected criminal conduct."
Entities are expected to submit SMRs within three business days of detecting potential money laundering activities or within 24 hours if there are indications of terrorism financing.
Thomas commended Cointree for cooperating fully, confessing the issue, and making proactive efforts to rectify its systems and procedures. He highlighted that, without such cooperation, the regulatory response could have been more severe.
As of press time, Cointree has not responded to our request for comment.
Fighting the Good Fight
This fine is part of AUSTRAC's ongoing crusade to tighten supervision over the digital currency exchange sector, deemed susceptible to criminal exploitation.
In 2024, AUSTRAC identified several concerns within the sector, including pseudonymity, global reach, and the swift pace of transactions. Since then, the agency has launched enforcement actions against 13 crypto businesses and raised concerns for over 50 others regarding potential AML shortcomings.
Recently, AUSTRAC reminded dormant businesses to comply or face removal from the registry. A public list of registered digital currency exchanges is set to be unveiled shortly. On a broader note, the Australian government recently appointed Andrew Charlton as Assistant Minister for Science, Technology, and the Digital Economy, with a focus on updating crypto regulation and improving oversight in the digital asset sector.
Last week saw the launch of the 'Use It or Lose It' campaign targeting inactive digital currency exchanges (DCEs), with around 25% of the 427 registered exchanges suspected to be dormant. Inactive businesses are at risk of being expelled from the registry or facing forced removal if they fail to comply.
As part of its efforts to enhance AML controls and combat financial crime, AUSTRAC is also preparing for stricter regulations set to take effect in March 2026. These regulations will impose mandatory registration and comprehensive reporting requirements on the crypto sector, fostering greater transparency and minimizing opportunities for criminal exploitation.
[Sources: 1, 2, 3, 4, 5]
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- The fine issued to Cointree by AUSTRAC highlights the growing need for strict crypto regulation in the digital currency exchange sector.
- In 2024, AUSTRAC identified several potential AML shortcomings within the digital currency exchange sector and has since launched enforcement actions against 13 companies.
- Australia's Assistant Minister for Science, Technology, and the Digital Economy, Andrew Charlton, has been appointed with a focus on updating crypto regulation and improving oversight in the digital asset sector.
- Last week, AUSTRAC launched the 'Use It or Lose It' campaign targeting inactive digital currency exchanges, with around 25% of the registered exchanges suspected to be dormant.
- In a broader move, the Australian government is preparing for stricter crypto regulations set to take effect in March 2026, which will impose mandatory registration and comprehensive reporting requirements on the crypto sector.
- Crypto exchanges must adhere to anti-money laundering (AML) regulations, with entities expected to submit suspicious transaction reports (SMRs) within three business days of detecting potential money laundering activities or within 24 hours for terrorism financing indications.
