Australia's financial watchdog, AUSTRAC, has mandated an external audit of Binance's local operations, citing significant concerns regarding the cryptocurrency exchange's anti-money laundering (AML) and counter-terrorist financing (CTF) controls. This move underscores the growing regulatory scrutiny of the digital asset sector.
Key Takeaways
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AUSTRAC orders an external audit of Binance Australia's AML/CTF systems.
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Concerns include high staff turnover and inadequate local management oversight.
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This follows previous regulatory actions against Binance in Australia.
Regulatory Concerns Prompt Audit
The Australian Transaction Reports and Analysis Centre (AUSTRAC) announced on Friday that it has directed Binance Australia to appoint an independent auditor. The decision stems from "serious concerns" identified with the exchange's AML/CTF systems. AUSTRAC CEO Brendan Thomas highlighted the increasing vulnerability of digital currencies to criminal exploitation, noting that the audit is part of a broader regulatory engagement with the crypto industry.
AUSTRAC also expressed worries about Binance's high staff turnover and a perceived lack of sufficient local resourcing and senior management oversight. These factors, according to the regulator, raise questions about the effectiveness of the firm's AML and CTF governance framework. "This is a global company operating across borders in a high-risk environment. We expect robust customer identification, due diligence and effective transaction monitoring," Thomas stated.
Binance Australia and New Zealand General Manager Matt Poblocki acknowledged AUSTRAC's decision, characterizing it as a "supervisory review measure" rather than an enforcement action.
Binance's Past Regulatory Challenges in Australia
This is not the first time Binance has faced regulatory pressure in Australia. In late 2024, the Australian Securities and Investments Commission (ASIC) initiated legal proceedings against Binance Australia Derivatives for alleged consumer protection failures. This action followed ASIC's search of Binance Australia's offices as part of an investigation into the exchange's now-defunct Australian derivatives business, which led to the cancellation of its license.
The license cancellation was a result of ASIC's review into Binance Derivatives' practice of closing user accounts, which was attributed to a misclassification of some users as "wholesale clients."
Furthermore, in 2023, Binance suspended its Australian dollar fiat money services after its local payment provider, Zepto, ceased support. Binance reportedly received less than a day's notice before being disconnected from the local banking system. Currently, users looking to withdraw Australian dollars are advised to use alternative methods, such as purchasing the USDT stablecoin for transfer or utilizing peer-to-peer trading services, as the direct "Bank Transfer" option remains suspended.
Sources
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Australian Regulator Orders Audit of Binance AML Systems, Cointelegraph.
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