AUSTRAC, Australia’s financial watchdog, has mandated Binance Australia to conduct an independent audit of its platform amid rising criminal activity involving digital assets.
Reasons for Binance Audit
AUSTRAC has instructed registered digital currency exchange providers, including Investbybit Pty Ltd, to conduct audits due to concerns over anti-money laundering (AML) and counter-terrorism financing (CFT). The regulator has given Binance 28 days to appoint an external auditor.
AUSTRAC CEO, Brendan Thomas, noted that the initiative follows an alarming increase in criminal activity regarding digital assets.
Issues with AML/CTF Compliance
Brendan Thomas emphasized that crypto companies must adapt to Australian regulatory requirements. He pointed out concerns regarding high staff turnover and lack of local resources at Binance, raising questions about the adequacy of its AML/CTF governance.
Moreover, AUSTRAC expects global crypto exchanges to implement robust customer identification, due diligence, and effective transaction monitoring.
Paxos Settlement with the U.S.
The U.S. Department of Financial Services has ordered Paxos Trust to pay a $26.5 million penalty for deficiencies in its anti-money laundering program linked to Binance. Paxos also agreed to invest an additional $22 million into its compliance program.
AUSTRAC and financial regulators are intensifying scrutiny over cryptocurrency platforms to prevent criminal activity, highlighting the importance of strict adherence to AML and CFT regulations by industry participants.
