Australia’s financial watchdog is clamping down on dormant crypto exchanges, warning them to “use it or lose it.” With 427 registered exchanges, many of which are inactive, regulators aim to curb criminal exploitation. This bold move signals Australia’s push to tighten oversight and protect its booming crypto market from risks.
“Use it or lose it.”
The Australian Transaction Reports and Analysis Centre (AUSTRAC) has launched a campaign targeting inactive digital currency exchanges (DCEs). Of the 427 registered exchanges in Australia, most are inactive, posing a risk of being exploited for illicit activities such as money laundering.
AUSTRAC is urging these platforms to voluntarily withdraw their registrations or face cancellation, emphasizing that only active and compliant businesses should operate. This action follows a proposed regulatory framework in March 2025, requiring exchanges to obtain Australian Financial Services Licences and adhere to strict custody and stablecoin rules. Australia’s crypto sector, with 31% of citizens holding digital assets, is a global leader in adoption.
However, regulatory delays have driven talent and capital overseas, prompting the government to take decisive action. The Australian Securities and Investments Commission (ASIC) supports this crackdown, with Chair Joe Longo calling recent penalties against non-compliant firms a “significant outcome.” This reflects Australia’s robust regulatory environment, which strikes a balance between innovation and consumer protection and aligns with global standards, such as the EU’s MiCA framework.
Australia Welcomes Crypto
Previous reports have shown that Australia is not hostile to virtual assets. For example, the Australian Investment management firm Monochrome launched its first Australian spot Ether exchange-traded fund (ETF) with the ticker IETH. This financial product is currently traded via the Cboe Global Markets. The company has been at the forefront of crypto ETF adoption in the Australian financial market. It also launched its first Bitcoin ETF, IBTC, which has raised approximately $10.1 million since 2023.
Additionally, in a bid to make the country a more secure haven for crypto investment, the Australian Federal Police (AFP) seized $6.4 million worth of cryptocurrencies belonging to Jay Je Yoon Jung, a 32-year-old Nawee man linked to a criminal messaging app. This is part of an investigation dubbed Operation Kraken, which targets organized criminal activities.
