Cryptocurrency exchanges Auscoin and SK BTC have been shut down by financial crime monitoring agency AUSTRAC, after a Melbourne man was arrested by federal police for links to an organised crime syndicate.

AUSTRAC (Australian Transaction Reports and Analysis Centre) suspended the registrations of the two exchanges that the man is involved with on Friday, following the arrest of the 27-year-old Bulleen man on drug trafficking offences.

The exchanges involved are Auscoin and SK BTC, reports iTNews.

Police will allege in court that the 27-year-old played a key role in directing the operations of the criminal syndicate, which used various dark net sites, bitcoin accounts and legitimate business for the sourcing, payment and distribution of the illicit drugs.

AUSTRAC took action immediately, national manager of 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,” Dr Newman said.

The full statement from AUSTRAC and the AFP can be read here.

Just as institutions are starting to have faith in crypto

A soft launch of Fidelity Investments’ crypto trading platform for institutions and a report from global investment firm Cambridge Associates on the sector is a sign institutional investors are starting to ramp up their entry into the cryptocurrency space, an expert says.

Fidelity Investments, which controls more than $7.2 trillion in assets and processes more than 1.3 million trades every day, announced today that its institutional solution, Fidelity Digital Assets, had gone live “with a select group of eligible clients focused on the needs of hedge funds, family offices, pensions, endowments, other institutional investors”.

And Cambridge Associates, which has around $360 billion in assets under advisement, last month released a report encouraging a “venture into the unknown” when it comes to crypto assets.

Henrik Andersson, Apollo Capital partner, told Stockhead the latter was the first time such a big investment house had released a report on cryptocurrency assets.

“It suggests that up to 1 per cent of crypto assets can make sense in an institutional portfolio,” he said. “We have been talking about the possible entry of institutional investors into crypto for some time and this is a sign that it’s gradually starting to happen now.”

Respected economic historian Niall Ferguson has also recently admitted he “got it wrong” on cryptocurrency.

Coupled with the pending launch of a global platform for digital assets run by the owner of the New York Stock Exchange, the Intercontinental Exchange — which Mr Andersson says is imminent — signs that institutions are taking the sector seriously can no longer be ignored.

“The next big piece of news will be that the platform is going ahead,” Mr Andersson said. “It has been waiting on approval from the US Commodity Futures Trading Commission (CFTC), and demand was too big to launch earlier in the year, so they are hiring more people.  That will be another big milestone in the crypto space.”

Mr Andersson also pointed to Twitter CEO Jack Dorsey’s personal endorsement of the technology and Facebook head honcho Mark Zuckerberg investigating using blockchain technology to help secure the social media behemoth.

But he says the recent death of Gerald Cotten, the founder of Canada’s largest crypto exchange QuadrigaCX who passed away without telling anyone the password, locking up some $190 million in assets, would not have a long-lasting impact.

“No, but that is why there is a big movement in the space right now for investing in decentralised exchanges, so that if someone does die, we don’t need to worry about them not telling anyone the password.”