AUSTRAC Challenges Binance's Local AML Preparedness

AUSTRAC has mandated an external audit for Binance Australia following concerns over its anti-money laundering (AML) and counter-terrorism financing (CTF) controls. The Australian Transaction Reports and Analysis Centre (AUSTRAC) cited "serious concerns" with the digital currency exchange’s compliance framework, emphasizing that its latest independent review was insufficient relative to the size and risk profile of the business. Binance Australia, a subsidiary of the global exchange, is required to appoint an external auditor within 28 days for AUSTRAC’s consideration and approval [2].

The regulatory action follows AUSTRAC’s National Risk Assessment 2024, which highlighted the growing susceptibility of digital currencies to criminal exploitation. AUSTRAC CEO Brendan Thomas emphasized the importance of operators understanding local money laundering and terrorism financing risks. “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,” he stated [1]. The regulator stressed that systems and processes must adapt to local regulatory frameworks rather than the other way around.

AUSTRAC also raised concerns about high staff turnover, limited local resourcing, and inadequate senior management oversight at Binance Australia. These factors have been cited as potential contributors to weaknesses in the exchange’s AML/CTF governance. The agency expects robust customer identification, due diligence, and effective transaction monitoring from global operators, particularly those handling high transaction volumes [1]. The regulator further urged all digital currency exchanges to remain vigilant for transactions that may indicate suspicious behavior, such as money laundering via scams or cybercrime.

This development marks the latest step in AUSTRAC’s broader efforts to combat financial crime in the cryptocurrency sector. In June, the agency introduced a cap of A$5,000 on cash deposits and withdrawals from crypto ATMs, citing concerns over fraudulent activity associated with the rapid expansion of digital asset ATMs [2]. The audit requirement follows a broader pattern of regulatory scrutiny for Binance, which in 2023 reached a $4.3 billion settlement with U.S. authorities over similar AML and sanctions violations [2].

Binance, which operates in approximately 20 jurisdictions and is considered the world’s largest centralized crypto exchange by transaction volume, faces increasing regulatory pressures globally. In Australia, the company has also drawn the attention of the corporate watchdog, which in December 2024 sued Binance’s local derivatives unit over alleged misclassification of retail clients as wholesale clients [3]. As the global crypto market continues to evolve, regulators like AUSTRAC are emphasizing the need for operators to align their risk controls with their business scale and market presence.

Source: [1] AUSTRAC orders audit of global crypto exchange (https://www.austrac.gov.au/news-and-media/media-release/austrac-orders-audit-global-crypto-exchange) [2] Australia Orders Binance Audit, Flagging 'Serious Concerns' (https://www.bloomberg.com/news/articles/2025-08-22/australia-orders-binance-audit-after-flagging-serious-concerns) [3] Australia watchdog orders Binance unit to conduct audit ... (https://www.reuters.com/sustainability/boards-policy-regulation/australia-watchdog-orders-binance-unit-conduct-audit-over-money-laundering-2025-08-22/)