Australian police recently arrested a 52-year old woman and charged her with illegally exchanging money for crypto. According to the local media report, it is believed to be the first arrest of its kind in the country.
The woman was arrested at a shopping center in Sydney as she was in the process of exchanging cash for crypto. Australian police accuse the woman of being part of an illegal group that is profiting from the illegal exchange of crypto for cash. During the arrest, the NSW police found around USD 38,736 in her possession as well as 3.8 BTC.
She has been charged with breaching regulations governing crypto exchange services and knowingly dealing with proceeds of crime. It was revealed that the investigation leading up to the arrest started in November 2018 when officers from the State Crime Command’s Cyber Security Squad created Strike Force Kerriwah. The strike force was tasked with investigating a money-laundering syndicate in NSW that was illegally exchanging cash for crypto.
According to the Commander of the Cybercrime Squad, the wallet they nabbed from the woman had been used to transact over 326 BTC since 2017. At current rates, that would be around USD 3.2 million. Upon a search of her home in Hurstville, the police found more BTC valued at around USD 11,500. Besides that, they seized mobile phones, computers, and telephones from the home.
The commander said that he believed it was the first time that an unregistered crypto exchange has been identified and an arrest and prosecution made. He added that the arrest would be the first in many that they would make in the coming years.
Australia and Regulation of the Crypto Sector
The crypto industry in Australia is allowed to thrive. However, the authorities insist that all crypto exchanges have to be registered. Trading in unregistered crypto exchanges is banned, as it is believed to facilitate money laundering in the country.
Towards the end of 2018, ASIC, which is the nation’s financial watchdog, launched the Corporate Plan 2018-2022. Under the plan, there is increased monitoring of digital technologies in the financial sector. It identified potential harm that could emanate from these technologies. At the time, some of the products mentioned were ICOs and cryptocurrencies.
Crypto has been legally recognized in Australia since 2017. Under current regulation, crypto is classified as property and it is subject to capital gains tax. Recently, the nation’s tax agency announced that it would send hundreds of thousands of warning letters to those in the crypto sector.
In 2018, AUSTRAC announced more robust regulation for crypto exchanges would be implemented. Under these rules, all crypto exchanges have to implement strict KYC and AML rules. Besides that, it stated that illegal crypto exchanges would be subject to financial penalties and criminal prosecution.
While it has taken nearly two years since the passing of the new law to seize an operator of an illegal crypto exchange, it might be the last. Those operating in Australia’s crypto sector should be wary of using unregistered crypto exchanges as it could to major legal challenges.
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