Cointree Fined $75K by AUSTRAC for Late Crypto Reports

AUSTRAC Fines Crypto Exchange Cointree $75K Over Reporting Failures, Highlights Growing Scrutiny in Digital Asset Sector

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has levied a $75,120 infringement notice against Melbourne-based cryptocurrency exchange Cointree Pty Ltd for failing to submit Suspicious Matter Reports (SMRs) within the legally mandated timeframe—marking another assertive step in Australia’s tightening grip on the digital asset space.

AUSTRAC Targets Reporting Delays Under AML/CTF Act

Cointree, a registered Digital Currency Exchange (DCE), voluntarily disclosed breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), which mandates that SMRs be submitted within:

• 24 hours for suspected terrorism financing, and
• 3 business days for suspected money laundering or other criminal activity.

The exchange failed to meet these critical deadlines, potentially delaying AUSTRAC’s ability to act on illicit financial activity. AUSTRAC CEO Brendan Thomas emphasized that timely reporting is essential to disrupt criminal networks and protect Australia’s financial system.

“Failing to submit SMRs on time undermines our collective efforts against financial crime. Cointree’s cooperation is noted, but timely compliance is not optional,” Thomas stated.

Cointree’s Response: Full Cooperation and Payment

Cointree has paid the fine in full, though AUSTRAC clarified that the payment does not constitute an admission of liability. The matter is now considered closed, provided no further compliance issues emerge.

In its public response, Cointree confirmed that it is investing in system upgrades, hiring compliance officers, and reviewing its internal controls to prevent similar oversights in the future.

Digital Currency Exchanges in AUSTRAC’s Crosshairs

The fine comes amid increasing regulatory scrutiny of Australia’s crypto sector. AUSTRAC’s 2024 National Risk Assessment had flagged the DCE industry as high-risk for money laundering due to:

• Global transferability of crypto assets,
• Pseudonymity of wallets and transactions,
• Weak oversight in cross-border jurisdictions.Other entities recently investigated include Binance Australia, BTC Markets, and CoinJar, all of whom have undergone compliance audits in the past 18 months.

Australia’s Regulatory Climate Tightens

Australia is moving toward a more regulated digital finance ecosystem, with the Australian Securities and Investments Commission (ASIC) and Treasury working on licensing frameworks for crypto service providers. These frameworks will include capital requirements, client fund segregation, and real-time transaction monitoring.

The Cointree incident further highlights AUSTRAC’s strategy of using monetary penalties as deterrents while pushing for sector-wide improvements in AML controls.

Industry Reactions and Global Context

Experts say the fine underscores a global trend where regulators are cracking down on crypto firms’ reporting practices. In 2024 alone:

• The U.S. FinCEN fined Bittrex $29 million for AML violations.
• The UK’s FCA rejected registration applications for over 80% of crypto applicants citing inadequate AML frameworks.
• Singapore’s MAS updated its Travel Rule compliance standards for VASPs (Virtual Asset Service Providers).

Compliance specialists like Chloe White, managing director at Genesis Block, argue that exchanges must now treat regulatory compliance as a core operational priority, not a secondary obligation.

What This Means for Crypto Operators

• No Tolerance for Late Reporting
  Regulatory agencies now expect crypto firms to meet traditional financial sector standards, particularly in SMR submission.
• Self-Disclosure Is a Mitigating Factor
  Cointree avoided harsher penalties through voluntary disclosure—a model other firms should emulate if compliance issues arise.
• Australia’s Licensing Framework Is Coming
  Crypto exchanges operating in Australia should prepare for formal licensing requirements by late 2025, including mandatory audits.

Final Thoughts

As global regulators tighten the reins on digital currency exchanges, Australia’s AUSTRAC is positioning itself at the forefront of crypto AML enforcement. The Cointree fine serves as a reminder that compliance is no longer optional—and that reporting delays carry financial and reputational costs.