The man allegedly was a key member of the firms known as AUSCOIN ATM and MK Buy & Sell. The trading name of the latter is SK BTC.
A joint statement from the Australian Transaction Reports and Analysis Centre and the AFP on Friday said the first phase of the investigation had resulted in two men being charged for drug trafficking offences in October 2017.
AUSTRAC is the government financial intelligence agency that monitors financial transactions to identify money laundering, organised crime, tax evasion, welfare fraud and terrorism.
The man was charged with importing, trafficking and possessing a total of approximately 30 kilograms of drugs, such as MDMA, cocaine, methamphetamine and ketamine.
Police will allege in court that he had a key role in the criminal syndicate, which used various sites on the dark web, bitcoin accounts and legitimate businesses to source, pay for, and distribute the drugs.
In a separate action, the AFP-led Criminal Assets Confiscation Taskforce sought to seize assets valued in excess of $2 million using court orders.
Among these were a number of bank accounts, properties, motor vehicles, a motorcycle, cash and cryptocurrency.
AFP detective superintendent Paul Hopkins said: “When you take the profit out of crime, you hit offenders where it hurts most. Combined with serious criminal charges attracting long prison sentences, this highlights how trafficking drugs is simply not worth it in the long-run.
“Investigations such as this are inherently complex and the operational results achieved by the investigative team are a testament to good police work and strong inter-agency co-operation.”
AUSTRAC national manager, Regulatory Operations, Dr Nathan Newman, said: “AUSTRAC’s role is to deter and disrupt criminal exploitation of Australia’s financial system and we take swift action where we there is a reasonable risk of compromise. Our decision to suspend the registration of the two businesses means they can no longer lawfully operate.”
The NSW Police and AUSTRAC later issued a statement, reminding digital currency exchange providers to be aware of their obligations following amendments to Commonwealth laws in 2018.
Dr Newman said: "“Digital currency exchange providers have had adequate time and opportunity to comply with these new laws and AUSTRAC has already refused the registration of two digital currency exchange providers. We continue to actively monitor the sector’s compliance.
“It’s important that digital currency exchange providers meet their obligations so we can identify any instances of criminal activity using their services to launder money, fund terrorism or commit other serious crimes.”
Cyber Crime Squad Commander, detective superintendent Matt Craft, said: “While cash is still ‘king’, digital currencies are fast becoming the preferred choice for organised criminal networks involved in money laundering, funding terrorism, and cyber crimes.
“These amendments were implemented to ensure digital currencies were being monitored in the same ways as cash exchanges and transfers. Any information about illicit activity by digital currency exchange providers that is provided to our squad – whether related to organised crime, terrorism, or technology-enabled crime – will be actively pursued in partnership with AUSTRAC.
“Let this be a warning to digital currency exchange providers: if you fail to comply with your obligations, your actions will not go unnoticed.”