AUSTRAC Fines Cointree AUD 75,120 for Late Suspicious Matter Reports

The Australian regulator, AUSTRAC, has fined the digital currency exchange provider, Cointree Pty Ltd, AUD 75,120 for failing to submit suspicious matter reports (SMRs) on time. This penalty was imposed under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Cointree acknowledged the facts but did not admit any wrongdoing by paying the fine. The issue is no longer under consideration by AUSTRAC.

AUSTRAC commended Cointree for voluntarily disclosing the delay in reporting and for taking steps to improve its systems. The regulator praised Cointree's cooperation and positive changes, opting not to pursue harsher penalties. Brendan Thomas, a representative from AUSTRAC, emphasized the critical role of timely SMRs in protecting national security. These reports are essential for law enforcement agencies to detect and prevent activities such as money laundering and terrorism financing. Delays in reporting can hinder investigations and compromise the country's financial security.

Thomas also highlighted that prompt reporting is vital for maintaining the nation's safety. Companies that fail to submit SMRs as required may indicate underlying issues within their organizations. Therefore, businesses must ensure they have robust systems in place to handle compliance tasks effectively. AUSTRAC has recently published a national risk assessment indicating that threats in the digital currency exchange (DCE) sector are increasing. The rapid operations, global impact, and strong anonymity in this sector have made financial crimes and money laundering more prevalent. As a result, AUSTRAC has made DCE compliance a priority for 2025.

The standards for SMRs are stringent. Businesses are required to submit a report within three days of suspecting money laundering and within 24 hours if there is a suspicion of terrorism financing. Failure to meet these deadlines constitutes a breach under the AML/CTF Act. AUSTRAC encouraged other firms in the industry to follow Cointree's example by publicly committing to improving their compliance procedures. This incident serves as a warning to regulated businesses, particularly those in digital finance, about the importance of adhering to legal and moral standards. Regulators are closely monitoring the market, and delays in reporting can result in significant consequences. Companies must strengthen their systems, act responsibly, and ensure the safety of Australia’s financial system.