Binance Faces AUSTRAC Scrutiny Over AML and CTF Concerns in Australia

Binance is once again under regulatory pressure, this time in Australia, where the country’s financial intelligence agency AUSTRAC has directed the exchange to appoint an external auditor following what it described as “serious concerns” regarding the platform’s anti-money laundering and counter-terrorism financing controls.

The watchdog has given Binance 28 days to put forward auditor candidates for AUSTRAC’s approval. Among the issues flagged were deficiencies in internal reviews, significant staff turnover, and a lack of on-the-ground management oversight.

AUSTRAC chief executive Brendan Thomas underscored the broader risks, stressing that the cryptocurrency sector remains highly vulnerable to financial crime and that global platforms need to demonstrate awareness of local obligations. “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,” Thomas said.

For its part, Binance sought to play down the regulator’s intervention, describing it as part of standard supervisory practices rather than a punitive move. Matt Poblocki, Binance’s general manager for Australia and New Zealand, said the firm “acknowledges AUSTRAC’s decision” and emphasized that it is “one of their supervisory review measures and not an enforcement action.”

Regulators, however, are demanding stronger measures, including more stringent customer due diligence, enhanced transaction monitoring, and clearer accountability at the highest levels of management.

Binance’s difficulties in Australia are not new. In 2023, the Australian Securities and Investments Commission revoked its derivatives license after finding that the exchange had misclassified clients as wholesale investors. That same year, ASIC carried out searches of Binance’s Australian offices as part of its ongoing probe.

The exchange has also faced hurdles in maintaining banking access. In a sudden move, payments partner Zepto withdrew its services with less than 24 hours’ notice, leaving Binance cut off from Australian dollar transfers. Currently, users are restricted to stablecoins or peer-to-peer transactions to move funds, with traditional bank transfers remaining suspended.

The regulatory squeeze in Australia is part of a broader pattern of scrutiny worldwide. In the United States, Paxos recently agreed to a $48.5 million settlement over anti-money laundering failures tied to its prior association with Binance. U.S. investigators alleged that billions in suspicious funds passed through the exchange, including transactions linked to sanctioned entities.

Similar crackdowns have emerged in Asia. Singapore has tightened requirements for crypto firms to secure licenses, while South Korea has imposed stricter oversight on lending products.

By fLEXI tEAM