Australia’s financial crime regulator AUSTRAC has directed the local unit of Binance to appoint an external auditor following concerns over the company’s anti-money laundering (AML) and counter-terrorism financing controls.
The decision comes after AUSTRAC completed a review into Binance’s compliance processes, which uncovered shortcomings in the platform’s governance and operational oversight, claims Reuters.
The regulator highlighted limited scope for independent compliance reviews, a lack of local staffing and insufficient senior management supervision as major weaknesses in Binance Australia’s current systems. AUSTRAC chief executive Brendan Thomas said the review underscored broader risks in the digital asset sector. “The AUSTRAC National Risk Assessment 2024 highlights the increasing vulnerability of digital currencies to criminal abuse,” Thomas said, stressing the need for major global operators to enforce stronger compliance controls, especially in high-risk areas involving large transaction volumes.
Binance Australia said it will comply with AUSTRAC’s directive. “Binance Australia acknowledges AUSTRAC’s decision to appoint an external auditor to independently review our anti-money laundering program,” Binance general manager for Australia and New Zealand Matt Poblocki said in a statement.
The development adds to growing regulatory scrutiny of Binance in Australia. The country’s corporate regulator, the Australian Securities and Investments Commission, sued Binance’s local derivatives arm in December over allegations it had incorrectly classified retail investors as wholesale clients, a move that gave them access to riskier financial products.
With AUSTRAC now demanding a full independent audit, Binance faces mounting pressure to strengthen its compliance framework in Australia, reflecting a global trend of tighter regulatory oversight on cryptocurrency exchanges amid concerns about financial crime.
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