Regulators in Australia have found Binance falling short on key compliance standards, ordering a compulsory external audit.
Summary
- AUSTRAC has directed Binance Australia to appoint an external auditor to strengthen its compliance controls.
- The regulator flagged limited scope in the exchange’s independent reviews and insufficient local senior management oversight.
- Authorities emphasized that all crypto exchanges in Australia must comply with local laws to avoid penalties.
Binance Australia has come under regulatory scrutiny for weaknesses in its anti-money laundering and counter-terrorism financing systems. According to an official Aug. 22 release, the Australian Transaction Reports and Analysis Centre (AUSTRAC) has directed the local arm of the exchange to appoint an external auditor to assess and strengthen its compliance controls.
AUSTRAC cited several concerns, including limited scope in Binance’s independent reviews, high staff turnover, and insufficient local senior management oversight, saying that the issues raise doubts about the adequacy of its AML and CTF governance.
The regulatory watchdog specifically noted that Binance’s latest independent review was not comprehensive enough given the company’s size, range of services, and the risks it handles.
AUSTRAC CEO Brendan Thomas emphasized that operators must adapt their systems to local laws, implementing strong safeguards that prevent criminals from concealing illicit funds using digital currencies.
“Big global operators may appear well resourced and positioned to meet complex regulatory requirements, but if they don’t understand local money laundering and terrorism financing risks, they are failing to meet their AML/CTF obligations in Australia,” the CEO added.
Binance Australia now has 28 days to nominate external auditors for AUSTRAC’s consideration and selection. The exchange must also implement stronger controls, including robust customer identification, thorough due diligence, and effective transaction monitoring.
Binance Australia crackdown part of broader regulatory overhaul
Throughout the year, Australian authorities have been tightening oversight of the local crypto industry. In February, AUSTRAC warned crypto exchanges and service providers to comply with anti-money laundering laws or face severe consequences.
At the time, authorities reviewed up to 50 crypto firms and took enforcement action against 13 for failing to meet requirements, including canceling, suspending, or refusing to renew their registrations.
The government also recently released a framework to regulate crypto rechargers and stablecoin issuers, aiming to protect consumers and uphold market integrity.
AUSTRAC reaffirmed that beyond Binance Australia, all crypto exchanges must ensure compliance with local laws to avoid operational risks and regulatory penalties.
