According to reports from the Australian Transaction Reports and Analysis Centre (AUSTRAC), two bitcoin exchanges have been suspended until further notice after being allegedly linked with criminal organizations.
The talks lead to the Australian Federal Police arresting someone allegedly in control of a drug distribution gang; a 27-year old man from Bulleen. After further checks by the AFP, it was discovered that the man whom they picked up was a high-level employee at one of the cryptocurrency exchanges under investigation.
Reports stated that he used his position to facilitate the purchase and distribution of drugs, by using bitcoins for all his transactions. He has been in the crosshairs of the police from as far back as October of 2017.
Raids were conducted at the syndicate’s home in Bulleen, not to mention his other properties in Malvern and Templestowe Lower respectively. They managed to confiscate hard cash, expensive vehicles, and items related to cryptocurrency. This evidence gave the AFP enough to charge the alleged syndicate for drug possession, as well as trafficking and importing 30kg of illegal substances including ketamine, MDMA, cocaine, and methamphetamine.
In a statement to the press, the police were intent on proving to the court that the 27-year old mastermind played a crucial part in running the operations of the drug organization. This includes the use of bitcoin accounts, genuine businesses and darknet sites that were used to source, distribute and pay for the illegal drugs.
In a separate incident, a restraining order was obtained by the Criminal Assets Confiscation Taskforce led by the AFP, in an attempt to take hold of all assets that may be somehow related to the investigation. The items recovered included motorbikes, several bank accounts, cash and properties for an overall total of more than AU$2 million.
The national manager of AUSTRAC, Dr. Nathan Newman, made it clear to criminal entities that their process of investigation is quite effective at targeting crimes that hide their illegal activity by using digital currencies.
He continued by saying the objective of AUSTRAC is to prevent and end criminal exploits within Australia’s financial system, by moving quickly when there is enough evidence. With the suspension now in place, it simply means that the two businesses in question can no longer operate lawfully.
According to Dr. Newman, amendments made to the Anti-Money Laundering and Counter-Terrorism Financing Act of 2006 gave them enough time to comply. Nevertheless, it’s even more necessary for businesses of this nature to get registered based on recent events. Along with registration, efforts should also be made to report suspicious transactions, know the customers, and conform to all record-keeping principles.
Dr. Newman made it clear that it’s important for digital currency exchange providers to make sure that they are fully compliant, so they can target anyone using the services to fund terrorism, launder money or commit other crimes.
In the same breath, however, the investigation could be expanded to include those persons who purchased drugs from the person now in police custody. If they were careless in their dealings, it’s quite possible that the AFP can trace the digital transactions to their personal bank accounts. In essence, bitcoins are not centered on privacy and according to several enforcement agencies across the world, it is highly overrated.
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