The Australian Transaction Reports and Analysis Centre (AUSTRAC) has mandated that Binance Australia conduct an external audit following the discovery of serious deficiencies in its anti-money laundering and counter-terrorism financing controls.
Serious Concerns Over AML/CTF Controls
AUSTRAC reported that Binance Australia has "serious concerns" regarding its compliance systems related to customer identification, due diligence, and transaction monitoring, which are critical to its AML/CTF obligations under Australian law. "This is a global company operating across borders in a high-risk environment," stated AUSTRAC CEO Brendan Thomas. "We expect robust customer identification, due diligence, and effective transaction monitoring controls to be in place to prevent criminal exploitation." Additionally, the regulator highlighted significant internal issues at Binance Australia, including: * High staff turnover * Lack of senior management presence in Australia * Insufficient local compliance resourcing.
Binance's Response: Audit Not an Enforcement Action
In response to AUSTRAC's directive, Matt Poblocki, Binance's general manager for Australia and New Zealand acknowledged the order and described it as part of the agency's supervisory review measures, emphasizing that it is "not an enforcement action." "Binance Australia acknowledges AUSTRAC’s decision and will cooperate fully with the independent audit process," Poblocki stated. He added that the exchange remains committed to strengthening its compliance systems and cooperating with regulatory authorities. Despite the conciliatory tone, the audit order is viewed as a serious reputational setback for Binance in Australia, where the exchange has faced increasing pressure from both financial regulators and banking institutions over the past two years.
Escalating Scrutiny from Australian Authorities
AUSTRAC's audit order follows a series of regulatory and legal actions against Binance in Australia, particularly from the Australian Securities and Investments Commission (ASIC). In late 2024, ASIC initiated legal proceedings against Binance Australia Derivatives, accusing the exchange of violations related to consumer protection tied to misclassifying users. Earlier, in mid-2023, ASIC conducted a raid on Binance's local offices as part of a broader investigation, leading to the cancellation of the derivatives license. Binance’s challenges in Australia also extend to the banking system. In May 2023, the exchange was effectively debanked when its local fiat payment partner, Zepto, severed ties, leaving users without access to Australian dollar deposits and withdrawals. To date, the platform still does not support direct AUD bank transfers.
The directive from AUSTRAC for an external audit of Binance Australia marks a pivotal moment for the exchange in one of the most regulated markets in the Asia-Pacific region. With fiat access severed and trust eroding among users and policymakers, Binance must now demonstrate its commitment to compliance and structural reform, especially as global regulatory scrutiny on crypto operations continues to intensify.
