AUSTRAC Intensifies Crackdown on Inactive Crypto Exchanges to Tackle Scams and Boost Regulatory Oversight
Australia’s financial regulator, AUSTRAC, is ramping up its crackdown on inactive or ’ghost’ cryptocurrency exchanges to address rising threats from scams and financial crimes in the digital asset sector. Registered Digital Currency Exchanges (DCEs) that are inactive must update their business details or risk being delisted from the national registry, as part of AUSTRAC’s ’use it or lose it’ policy. Out of 427 registered Australian exchanges, many appear dormant and could be exploited by criminals for money laundering or scams. Since 2019, AUSTRAC has revoked registrations from at least 10 exchanges, including the high-profile FTX Express in June 2024, and dozens more are under investigation. Exchanges can voluntarily withdraw or face forced cancellation if inactive, while AUSTRAC will soon publish an updated public list of registered DCEs to enhance transparency and consumer confidence. The regulator continues to enforce strict monitoring and legal action capabilities, including a February 2025 crackdown on underreporting by crypto institutions. These steps signal stronger government oversight in Australia’s crypto market, aiming to reduce scam risks, ensure compliance, and reassure traders and investors of a safer digital asset trading environment.
Neutral
The intensified regulatory action by AUSTRAC targets inactive crypto exchanges to address scam and financial crime risks, which enhances market transparency and investor confidence. While it may temporarily increase compliance costs and cause uncertainty for some platforms, the move primarily aims to cleanse the market of bad actors rather than restrict healthy trading activity. Over the short term, the direct price impact on major cryptocurrencies is likely limited. In the long term, strengthened regulations can foster a safer trading environment and greater institutional participation, balancing risks and opportunities for traders. Thus, the overall impact on the crypto market remains neutral.