Australia Warns Inactive Crypto Exchanges of Potential Deregistration

Australia Cracks Down on Inactive Crypto Exchanges

What’s changing in Australia’s crypto space?

If you’re part of the crypto scene in Australia—or even just watching from the sidelines—you might want to pay attention to the latest move from the country’s top financial authority. The Australian Transaction Reports and Analysis Centre (AUSTRAC) has issued a clear warning: crypto exchanges that are sitting idle could face deregistration.

So, what does this mean for crypto businesses and users? And why is AUSTRAC stepping up now? Let’s break it all down.

Why is AUSTRAC targeting inactive exchanges?

At its core, AUSTRAC’s job is to fight financial crimes like money laundering, fraud, and terrorism financing. As crypto platforms deal with digital assets and financial transactions, they naturally fall into AUSTRAC’s scope.

Lately, AUSTRAC has noticed a growing issue: exchanges that register but never actually operate. Imagine setting up a storefront but never opening the door. These inactive crypto exchanges just sit there—no transactions, no users, nothing happening.

Why does that matter? Because inactive accounts can become security loopholes. They can be:

• Used for illegal transactions
• Bought or sold to unverified owners
• Exploited by cybercriminals for hidden operations

That’s why AUSTRAC wants to clean house.

The new steps AUSTRAC is taking

To tackle the issue, AUSTRAC is now actively reviewing all registered crypto exchanges. If a platform hasn’t shown any signs of life—no transactions, low website visits, or no business operations in sight—it could be at risk of being removed from the official register.

Here’s how they’re doing it:

• Asking inactive exchanges if they’re planning to start operations soon
• Looking at digital signals, like whether the exchange’s website is active
• Reviewing past activity and business intent

If there’s no solid explanation or plan for future activity, AUSTRAC may hit the delete button.

Who’s affected?

Primarily, this impacts Digital Currency Exchange (DCE) providers—also known as crypto exchanges. These are businesses that let people buy, sell, or swap cryptocurrencies like Bitcoin, Ethereum, and others.

According to current Australian law, all DCEs must:

• Register with AUSTRAC before starting operations
• Follow anti-money laundering (AML) rules
• Keep records and report suspicious transactions

If you’re an individual using crypto exchanges, there’s no direct action you need to take, but it’s always smart to make sure you’re trading on a platform that is compliant and properly registered.

Why it matters for crypto users like you

Let’s say you’re investing, trading, or simply holding crypto in Australia. You want to use platforms that follow regulations, act responsibly, and secure your data and funds. Knowing that AUSTRAC is cleaning out inactive and potentially risky exchanges should give you more peace of mind.

It’s a bit like the government checking restaurants for valid licenses—if a place isn’t up to par, it gets shut down. The goal is to protect consumers and make the space safer for everyone involved.

This isn’t just about shutting down sites

Interestingly, AUSTRAC isn’t cracking down just to reduce numbers. In fact, as recently as March 2024, the number of registered crypto exchanges in Australia jumped to over 600. That’s a sharp increase from about 400 just a few months earlier. But several of those were inactive or only registered to “keep the option open.”

So AUSTRAC’s message is simple: If you register, then operate. If not, don’t take up space.

How will this affect the Australian crypto market?

For the short term, we may see a drop in the number of registered exchanges. But that doesn’t mean fewer options for users. Instead, it likely means that only serious, operational businesses will remain.

Cleaner records also lead to stronger regulations. And with growing international pressure to monitor crypto activity, Australia is showing it wants to stay ahead of the curve.

This could lead to:

• Better trust in the crypto ecosystem
• Fewer scams and unreliable platforms
• More confidence for investors and institutions

What should crypto businesses do?

If you’re running—or planning to run—a crypto exchange in Australia, it’s a good idea to:

• Get your house in order: Make sure your platform is active and operational
• Communicate with AUSTRAC: Be transparent about your business plans
• Stay compliant: Follow AML and reporting requirements seriously

Registering just to “hold a spot” may no longer be acceptable. AUSTRAC is now watching more closely and wants to ensure transparency from all registered businesses.

Why now?

Crypto is evolving fast. Governments across the globe are tightening regulations, especially after multiple reports of crypto scams and fraud over the past few years.

Australia isn’t alone in this. Countries like the U.S., UK, and Japan are all looking at how to better secure the crypto environment. With increasing adoption and institutional interest, the stakes are higher than ever.

By addressing inactive entities today, AUSTRAC is trying to close loopholes before they become real problems.

What can users do to stay safe?

As a crypto user, you’re not helpless. Here are a few steps you can take:

• Use exchanges that are active and officially registered
• Check for terms like “AML compliant” or “AUSTRAC registered” when signing up
• Stay informed about changes in crypto regulations

And if you ever feel unsure about a platform—trust your gut. Read reviews, visit forums, or compare options before sharing your financial details.

A responsible future for crypto in Australia

AUSTRAC’s latest move is part of a broader message: if you want to work with crypto in Australia, play by the rules. And while rules can sometimes feel like red tape, they often serve an important purpose—keeping the game fair and protecting those involved.

For businesses, it’s a chance to show dedication and build trust. For users, it offers a safer space to explore, invest, and grow.

The crypto industry is still young, but actions like these help lay the foundation for long-term success.

The takeaway

Crypto is more than just digital coins—it’s businesses, users, security, and innovation wrapped into one evolving world. By cracking down on inactive crypto exchanges, AUSTRAC is sending a clear signal: only serious players should stay in the game.

If you’re in the crypto space, whether as a business owner or user, stay alert and stay informed. Regulation isn’t a roadblock—it’s part of the path forward.