AUSTRAC Fines Cointree A$75,120 for Late Suspicious Matter Reports

Australia’s financial intelligence agency, AUSTRAC, has imposed a fine of A$75,120 on the Melbourne-based crypto exchange Cointree for submitting suspicious matter reports (SMRs) after the legal deadline. This penalty underscores the importance of timely reporting in the cryptocurrency industry, as delayed filings can hinder criminal investigations and the tracing of illicit funds.

According to AUSTRAC guidelines, exchanges are required to file an SMR within three business days when they suspect money laundering and within 24 hours for terrorism-financing concerns. Cointree’s late filings were attributed to internal workflow gaps, which the exchange has since addressed to prevent future delays. AUSTRAC’s chief executive, Brendan Thomas, emphasized the critical role of prompt reporting in enabling authorities to respond swiftly to suspected criminal activity.

This penalty is part of a broader crackdown by AUSTRAC on digital-asset platforms, which has seen the regulator take formal action against 13 exchanges and send warning letters to more than 50 others since the start of 2024. The agency has also identified 427 registered crypto exchanges that appear inactive and may cancel their registrations. To protect consumers from scams and deregistered companies, AUSTRAC plans to introduce a public register listing legitimate platforms.

In a related move, the Federal Court approved the Australian Securities and Investments Commission’s (ASIC) request to shut down 95 companies tied to pig-butchering crypto and romance scams. Justice Stewart cited false registrations and overwhelming evidence, recommending deregistration for 92 of the companies. Victims from 14 countries filed nearly 1,500 claims, reporting losses exceeding $35.8 million. ASIC continues to combat scams, shutting down around 130 fraudulent websites each week and closing more than 10,000 platforms to safeguard investors.

Globally, regulators are doubling down on preemptive oversight of the cryptocurrency sector. For instance, KuCoin, operated by Peken Global, agreed to a $297 million fine in the U.S. for operating without a money-transmitting license and having weak anti-money laundering (AML) and know-your-customer (KYC) controls. Regulators found that KuCoin failed to report suspicious activity on billions in transactions and only partially implemented KYC checks.

Similarly, the UK’s Crypto Asset Reporting Framework (CARF), set for 2027, will require firms to submit detailed user and transaction data to tax authorities. Late, incomplete, or inaccurate filings may result in steep fines, with noncompliant firms facing penalties of up to £300 per user. These actions illustrate a worldwide trend where regulators demand rigorous, timely compliance from crypto businesses. Companies that neglect registration requirements, fail to flag suspicious activity, or delay reporting now face hefty fines and potential deregistration, emphasizing the industry’s shift from reactive enforcement to proactive oversight.

While fines are the most common penalty for late SMR filings, repeated or intentional delays could result in criminal liability for executives under Australia’s anti-money laundering laws. The level of negligence or involvement by senior management will determine the severity of the consequences. AUSTRAC’s public license register is expected to increase transparency and investor confidence by allowing investors to easily identify compliant exchanges. However, it may also expose inactive or non-compliant firms, pushing platforms to maintain strict standards or face loss of credibility and customer trust.