Australia’s financial intelligence agency is cracking down on inactive crypto exchanges, warning they could be deregistered to prevent misuse by criminals.

The Australian Transaction Reports and Analysis Centre — also known as AUSTRAC — said many crypto exchange providers are no longer operating, yet remain on the official register, and now risk being deregistered if they fail to voluntarily withdraw.

In a Tuesday press release, AUSTRAC said there are currently 427 registered crypto exchanges, but AUSTRAC is contacting those that appear to no longer be trading.

“Businesses registered with AUSTRAC are required to keep their details up to date; this includes details about services that are no longer provided. […] Our intelligence shows cryptocurrency can be exploited by criminals for money laundering, scams and money mule activities, and we’re seeing far too many people falling victim to scams involving digital currency.”

AUSTRAC CEO Brendan Thomas

As AUSTRAC noted, all crypto exchanges and ATM providers must be registered before offering services to exchange cryptocurrency for cash or vice versa as they pose a risk of being misused.

Thomas said businesses offering cryptocurrency exchange services are in a “high risk sector,” and because AUSTRAC registration gives them legitimacy, inactive ones can be targeted and taken over by criminals.

AUSTRAC said it may cancel registrations where there are “reasonable grounds” to believe the business is no longer operating, adding that these cancellations will be published on AUSTRAC’s website. The agency also plans to launch a publicly searchable register so consumers can check whether a crypto exchange is registered and under regulatory oversight.