Regulators Force Binance to Audit AML Gaps Amid Crypto Crime Surge

AUSTRAC has mandated that Binance Australia engage an external auditor to review its anti-money laundering (AML) and counter-terrorism financing (CTF) controls, following a comprehensive review that uncovered serious shortcomings in compliance frameworks. The Australian Transaction Reports and Analysis Centre (AUSTRAC) identified concerns including a limited scope for independent oversight, high staff turnover, inadequate local staffing, and weak senior management supervision at the exchange. The regulator highlighted that the scale and complexity of Binance’s operations in Australia necessitate more robust internal governance mechanisms to mitigate financial crime risks [1].

AUSTRAC CEO Brendan Thomas emphasized the growing vulnerability of digital currencies to criminal exploitation, citing the regulator’s 2024 National Risk Assessment. He noted that global operators must align their systems to meet local regulatory expectations, particularly in high-risk sectors with high transaction volumes. The regulator also expressed concerns about Binance Australia’s ability to fully understand and address local money laundering and terrorism financing risks [2]. Thomas underscored the importance of customer identification, due diligence, and transaction monitoring as essential components of an effective AML/CTF framework [3].

The audit directive is part of a broader regulatory strategy by AUSTRAC to tighten controls in the cryptocurrency sector, which has increasingly attracted illicit activity. In June 2025, AUSTRAC introduced a $5,000 limit on cash deposits and withdrawals at crypto ATMs, citing a surge in digital asset-related fraud. This action followed the regulator’s warning that the proliferation of crypto ATMs had become a vector for scams and fraudulent schemes. The move against Binance aligns with these efforts to impose tighter oversight on platforms operating in the Australian market [2].

Binance has faced heightened scrutiny from Australian regulators in recent years. In late 2024, the Australian Securities and Investments Commission (ASIC) initiated legal proceedings against Binance Australia Derivatives over alleged consumer protection violations. Earlier, in 2023, ASIC conducted a search of Binance Australia’s offices as part of an investigation into its defunct derivatives business. The regulator had previously revoked Binance Australia Derivatives' license following concerns over improper classification of retail users as wholesale clients. These prior actions indicate a pattern of regulatory engagement with the exchange [3].

Binance Australia’s challenges extend beyond AML controls. In 2023, the company was forced to suspend Australian dollar fiat services after its local payment partner, Zepto, was directed to cut ties with the platform. This left Binance users with limited options for withdrawing local currency, forcing many to rely on stablecoins or peer-to-peer transactions. The exchange has since advised Australian users to use alternative methods for fiat withdrawals due to the ongoing suspension of traditional banking channels [3].

The regulator has maintained a firm stance on the need for stronger compliance from large global operators. According to AUSTRAC, even well-resourced firms may fail to meet local obligations if they do not tailor their systems to address specific regional risks. The external audit is a supervisory measure rather than an enforcement action, according to Binance Australia General Manager Matt Poblocki, who stated that the exchange acknowledges the regulator’s decision. The outcome of the audit could influence future regulatory engagement with the company and other major crypto operators in the region [1].

Source:

[1] title1 (https://www.reuters.com/sustainability/boards-policy-regulation/australia-watchdog-orders-binance-unit-conduct-audit-over-money-laundering-2025-08-22/)

[2] title2 (https://www.bloomberg.com/news/articles/2025-08-22/australia-orders-binance-audit-after-flagging-serious-concerns)

[3] title3 (https://cointelegraph.com/news/australia-orders-external-audit-of-binance-s-local-unit-over-aml-concerns)