Australia Bans Two Bitcoin Exchanges: Reportely Linked to Drug Syndicates

Kenny Grant
March 11, 2019

The move comes after a key executive in both of the operations was arrested by police on Thursday following a series of raids that were conducted by the Australian Federal Police (AFP), which had been investigating organized crime in the country.

What is your response to the suspension of the cryptocurrency exchanges' licensing?

The investigation into the syndicate, which has been importing drugs via worldwide mail into Melbourne, is continuing. They found steroids, cryptocurrency-related items, and Australian fiat, which were all seized.

As detailed by Austrac, the initial phase of the AFP investigation led to two men being charged for drug trafficking offences in October 2017, with the men allegedly importing border controlled drugs via global mail into Melbourne.

In particular, a 27-year-old-man was arrested and charged with playing a key role in the alleged drug importing and trafficking enterprise.

The AFP-led Criminal Assets Confiscation Taskforce (CACT) also sought the restraint of assets related to the investigation. AFP Detective Superintendent Paul Hopkins stated, "Investigations such as this are inherently complex and the operational results achieved by the investigative team are a testament to good police work and strong interagency cooperation".

Austrac said orders were obtained from the County Court of Victoria to restrain property valued in excess of AU$2 million, which included several bank accounts, real estate properties, motor vehicles, a motorbike, cash, and cryptocurrency.

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While the reports haven't yet revealed which the two cryptocurrency exchanges are, it details that they won't operate until further notice.

Australia's money laundering and counter terrorism financing watchdog - says that it has suspended the registrations of two digital currency exchanges.

The arrest and the subsequent shutdowns prompted an announcement from AUSTRAC and the New South Wales Police Force reminding digital currency exchanges of their reporting obligations.

The authorities directed digital currency trading providers to register with AUSTRAC, verify their customers' identity, report suspicious matters, including over-the-counter cash transactions, and comply with record-keeping requirements, per the amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 past year.

Dr. Nathan Newman, AUSTRAC National Manager for Regulatory Operations, explained that there is no excuse for cryptocurency exchanges who claim that they haven't had enough time to become compliant.

The two exchanges that were shut down by AUSTRAC were identified as AUSCOIN ATM and MK Buy & Sell, which operates as SK BTC.

Update 5:00pm: To include information on suspended exchange providers. There remains a possibility that the accused used these exchanges to facilitate crypto payments for drug trafficking.

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