Crypto Exchange Cointree Fined for Lax Compliance, AUSTRAC Cracks Down on Digital Currency Industry
The Exchange's AML/CTF Missteps Cost Them Heavily
Cointree, an Australian Cryptocurrency Exchange, Faced Penalty for Delays in Filing Suspicious Activity Reports
Australia's financial intelligence agency AUSTRAC has hit Melbourne-based crypto exchange Cointree Pty Ltd with a whopping $75,120 fine for neglecting to submit suspicious activity reports (SMRs) within the stipulated deadlines. The violation of Australia's Anti-Money Laundering/Countering Terrorism Financing (AML/CTF) regulations prompted AUSTRAC's enforcement action.
Cointree admitted to the reporting lapses and is now rectifying its internal compliance systems, according to a statement released on Thursday. The digital currency exchange with Australia's fastest-growing user base is cooperating fully and taking proactive measures to mend its systems and controls. The regulatory response could have been more stringent had Cointree not promptly disclosed and addressed the issue.
A Blow to Crypto Companies Ignoring Compliance Obligations
AUSTRAC CEO Brendan Thomas said timely reporting is crucial for promptly battling financial crimes. Firms neglecting compliance with AML/CTF regulations face stiffer penalties. The fine on Cointree is part of AUSTRAC's increased scrutiny of Australia's digital currency exchange sector, which the agency views as vulnerable to illicit activities.
Earlier, in 2024, AUSTRAC identified concerns such as pseudonymity, global reach, and speed of transfers within the digital asset sector. As a result, AUSTRAC has initiated enforcement actions against 13 crypto businesses until now and has cautioned over 50 others of potential compliance issues.
Dormant registrations were another area of concern. As a result, AUSTRAC has launched a "use it or lose it" campaign, warning inactive DCEs to either cease operations or withdraw voluntarily. A public registry of active providers is also set to be unveiled soon.
The recent appointment of Andrew Charlton as Assistant Minister for Science, Technology, and the Digital Economy by the Australian government aims to expedite crypto regulations and improve oversight in the digital asset sector.
Emphasis on AML/CTF Compliance
Entities are required to submit SMRs within three business days if they suspect money laundering and within 24 hours for suspected terrorism financing. Failure to comply could lead to regulatory action, as evidenced by Cointree's fine.
The importance of robust AML/CTF systems is not to be overlooked, as it safeguards both businesses and consumers from criminal misuse of digital assets. Businesses must strive to meet these compliance obligations to prevent regulatory actions and maintain public trust.
Article Edited by Sebastian Sinclair
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In a broader perspective, AUSTRAC's stronger focus on AML/CTF compliance underlines the growing importance of regulating digital currency activities in Australia. Notably, AUSTRAC had earlier canceled the registration of FTX Express, a local subsidiary of the collapsed crypto exchange FTX, in June 2024. Numerous measures, including targeted enforcement campaigns and crackdowns on crypto ATMs, underscore AUSTRAC's effort to develop a secure and compliant environment for cryptocurrency transactions in the country.
- AUSTRAC has fined Melbourne-based crypto exchange Cointree Pty Ltd $75,120 for failing to submit suspicious activity reports (SMRs) on time, citing lapses in their Anti-Money Laundering/Countering Terrorism Financing (AML/CTF) regulations.
- Cointree has acknowledged the reporting lapses and is working to rectify its internal compliance systems, cooperating fully and taking proactive measures to improve systems and controls.
- AUSTRAC CEO Brendan Thomas emphasizes that timely reporting is essential to combat financial crimes, and companies neglecting AML/CTF regulations will face stiffer penalties.
- Over the past few years, AUSTRAC has taken enforcement actions against 13 crypto businesses and has cautioned over 50 others about potential compliance issues.
- To combat inactive digital currency exchanges (DCEs), AUSTRAC has launched a "use it or lose it" campaign, warning inactive DCEs to either cease operations or withdraw voluntarily.
- The recent appointment of Andrew Charlton as Assistant Minister for Science, Technology, and the Digital Economy by the Australian government aims to expedite crypto regulations and improve oversight in the digital asset sector. The focus remains on ensuring robust AML/CTF systems to protect both businesses and consumers from criminal misuse of digital assets.
