AUSTRAC Demands Binance Audit Over Governance Gaps in Crypto War

AUSTRAC, Australia’s financial crimes regulatory body, has mandated that Binance Australia, the local arm of the world’s largest cryptocurrency exchange by volume, appoint an external auditor following the identification of “serious concerns” regarding its anti-money laundering (AML) and counter-terrorism financing (CTF) controls. The agency highlighted several issues, including a recent independent review of Binance Australia that it described as “limited in scope relative to its size, business offerings and risks” [1]. AUSTRAC has given the company 28 days to nominate auditors for its consideration and eventual selection [2].

The regulatory move comes amid growing scrutiny of digital currency platforms over their vulnerability to criminal abuse. According to AUSTRAC CEO Brendan Thomas, the agency’s National Risk Assessment 2024 underscores the increasing susceptibility of digital currencies to misuse, particularly in high-risk sectors with large transaction volumes. “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 obligations in Australia,” he stated [2].

AUSTRAC raised specific concerns about Binance Australia’s staffing challenges, including high staff turnover, a lack of local resourcing, and insufficient senior management oversight. These factors, the regulator said, raise questions about the adequacy of Binance Australia’s AML/CTF governance framework. Thomas emphasized that while businesses may operate across multiple jurisdictions, their systems must adapt to meet local regulatory requirements rather than the other way around [1]. He also called for more rigorous independent reviews, urging businesses to ensure these assessments cover critical processes and controls [2].

The agency expects major global operators to maintain robust customer identification, due diligence, and transaction monitoring systems. Thomas reiterated that digital currency exchanges must remain vigilant for transactions indicative of suspicious behavior, including money laundering through scams, cybercrime, and terrorism financing—risks that are particularly pronounced for global exchanges [2]. The regulator is clear that the capacity and risk controls of digital currency operators must scale in line with their business size and market presence.

The directive is the latest in a series of regulatory actions against Binance in Australia. In December 2024, the Australian Securities and Investments Commission (ASIC) initiated legal proceedings against Binance Australia’s derivatives unit over alleged misclassification of retail clients as wholesale clients. This is also the second regulatory intervention by AUSTRAC in a year after it imposed a $5,000 limit on crypto ATM transactions in June 2025 to curb fraud and scams [1]. In the United States, Binance and its founder Changpeng Zhao have already pleaded guilty to AML and sanctions violations, agreeing to a $4.3 billion settlement [1].

Binance Australia has not yet responded to requests for comment. The outcome of the audit process will be closely watched by regulators and industry participants alike, as it could influence future AML/CTF enforcement actions and compliance standards for global crypto platforms operating in Australia.

Source:

[1] Australia Orders Binance Audit, Flagging 'Serious Concerns' (https://www.bloomberg.com/news/articles/2025-08-22/australia-orders-binance-audit-after-flagging-serious-concerns)

[2] AUSTRAC orders audit of global crypto exchange (https://www.austrac.gov.au/news-and-media/media-release/austrac-orders-audit-global-crypto-exchange)

[3] Money laundering watchdog calls in auditors at Binance (https://www.afr.com/technology/money-laundering-watchdog-calls-in-auditors-at-binance-20250822-p5mp2i)

[4] 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/)