Australia Shuts Down Two Cryptocurrency Exchanges Associated with Drug Trafficking

Two Australian Bitcoin exchanges shut down following arrest of key executive

AUSTRAC suspends two crypto exchanges after arrest

Vision of arrest and motorbike being seized (above) supplied to Micky by AFP.

An investigation by the AFP began two years ago after two men from Victoria were arrested and tied to a drug importation ring. The AFP found that the accused was an executive at one of the banned cryptocurrency exchanges. Along with possession, he was also charged with the importing and trafficking of these drugs. The agency reportedly continued their probe, which led them to reveal an email-based drug trafficking organization operating out of Australian suburbs Bulleen, Templestowe Lower, and Malvern.

Police will allege in court that the 27-year-old played a key role in directing the operations of the criminal syndicate, which used various dark net sites, bitcoin accounts and legitimate business for the sourcing, payment and distribution of the illicit drugs.

The 27-year-old Bulleen man was subsequently arrested and charged with importing, trafficking and possessing a total of approximately 30 kilograms of drugs, such as MDMA, cocaine, methamphetamine and ketamine.

Separately, the AFP-led Criminal Assets Confiscation Taskforce (CACT) obtained a restraining order for assets related to the investigation.

Two Australian Bitcoin exchanges shut down following arrest of key executive

Australian Federal Police 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 inter-agency cooperation".

Following the arrest, Austrac said it suspended the registration of two digital currency exchange businesses where the man was a key member, removing their ability to continue to conduct business.

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.

Last April, several amendments were made to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. According to the provisions of this law, cryptocurrency exchanges have to register with AUSTRAC, need to verify the identity of their customers, and immediately report any suspicious activity to the regulating authority.

The two exchanges that were shut down by AUSTRAC were identified as AUSCOIN ATM and MK Buy & Sell, which operates as SK BTC. It is also required to make the crypto environment free from crime and stop illicit activities like money laundering and terror financing that can potentially misuse the exchanges for their criminal motives. The exchanges' registration was immediately suspended after the man's arrest, with Austrac national manager of regulatory operations Dr. Nathan Newman stating that the exchanges will not be permitted to resume operations until further notice.

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