Summary
AUSTRAC helped investigate and convict someone who used a digital currency (cryptocurrency) to buy, import and sell illicit drugs through a black market website.
What to look out for
- Multiple low-value international funds transfers.
- An increase over time in the value of transactions with a digital currency exchange.
The crime
Law enforcement intercepted a number of packages containing MDMA and cocaine sent by post from Europe to an individual in Australia. On investigation they found he had registered an online account with a black market website and used the account to buy, import and sell illicit drugs using digital currency (cryptocurrency). They also found illicit drugs and other items associated with drug trafficking at his home.
AUSTRAC identified that the offender had sent funds to a digital currency (cryptocurrency) exchange to purchase the digital currency.
Penalties
The offender was sentenced to three years and six months in jail and fined A$1000 for possessing controlled weapons.
How business reporting helped
Regulated entities who submitted international funds transfer instructions reports on the use of digital currencies (cryptocurrencies) revealed the offender’s transactions to AUSTRAC.
AUSTRAC’s role
AUSTRAC’s financial analysis outlined exactly how the offender used IFTIs transferred via banks to purchase the digital currency (cryptocurrency) from the overseas-based exchange.
Over six months he had made 13 outgoing IFTIs totalling A$28,000. He gradually increased the transaction value of the IFTIs over the six months and also received two incoming IFTIs totalling approximately A$2000 from the same online exchange.
This guidance sets out how we interpret the Act, along with associated Rules and regulations. Australian courts are ultimately responsible for interpreting these laws and determining if any provisions of these laws are contravened.
The examples and scenarios in this guidance are meant to help explain our interpretation of these laws. They’re not exhaustive or meant to cover every possible scenario.
This guidance provides general information and isn't a substitute for legal advice. This guidance avoids legal language wherever possible and it might include generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.