- Australia’s financial crime regulator, AUSTRAC, has ordered Binance’s local subsidiary to appoint an external auditor after identifying “deficiencies” in its anti-money laundering (AML) and counter-terrorism financing framework.
- The order is a result of AUSTRAC’s findings of persistent governance failures, including rapid staff turnover, a minimal local presence, and poor senior management oversight within Binance Australia.
- This is the latest in a series of regulatory pressures on the exchange, which also faced legal action from Australia’s corporate regulator and saw its founder, Changpeng “CZ” Zhao, sentenced in the U.S. for money laundering violations.
Australia’s financial crime regulator has ordered Binance’s local subsidiary to bring in an external auditor after finding “deficiencies” in its anti-money laundering (AML) and counter-terrorism financing framework.
The firm now has 28 days to propose independent auditors for AUSTRAC’s approval. The regulator said its demand stems from persistent governance failures, such as rapid staff churn, minimal local presence, and poor oversight from senior managers as structural weaknesses in the exchange’s compliance program.
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More Regulatory Pressure For Binance Australia
The scrutiny adds another chapter to Binance’s troubled regulatory record. Authorities in multiple jurisdictions raised red flags as early as 2021 about whether the exchange was authorised to operate.
Worth mentioning that AUSTRAC has also widened its campaign against financial crime risks in the digital asset sector. Earlier this year it imposed new compliance requirements on crypto ATM providers, citing their use in scams, and has stated it will apply the same proactive approach to larger global players.
The subsidiary’s credibility was also affected in 2024 when Binance’s founder, Changpeng “CZ” Zhao, was handed a four-month sentence in the US after admitting to money laundering violations.
Matt Poblocki, who heads Binance’s operations in Australia and New Zealand, stressed that the firm has been cooperating with the regulator. Speaking to Bloomberg, he said:
We have engaged openly and transparently with AUSTRAC over the past several months and continue to value their guidance, expertise, and oversight. We remain committed to maintaining best-in-class compliance standards and will continuously enhance our capabilities.
Matt Poblocki, BinanceAll in all, the exchange has been under regulatory pressure for some time in Australia. In December, Australia’s corporate regulator launched legal action against its derivatives arm, accusing it of wrongly classifying retail investors as wholesale clients.
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