Regulators Force Binance to Audit Over Governance Gaps in Australia

AUSTRAC has mandated that Binance Australia appoint an external auditor following concerns regarding its anti-money laundering and counter-terrorism financing (AML/CTF) controls. This directive stems from the regulator’s evaluation of the crypto exchange's governance, which highlighted significant shortcomings in compliance practices. According to AUSTRAC, the findings were informed by a recent independent review of Binance Australia, which was deemed insufficient given the scale and complexity of the firm’s operations.

AUSTRAC’s National Risk Assessment 2024 emphasized the growing risk of digital currencies being exploited for criminal activities, such as money laundering and terrorism financing. Brendan Thomas, AUSTRAC’s CEO, underscored the importance of adapting global systems to meet local regulatory requirements, particularly for firms operating in high-risk environments with large transaction volumes. He noted that despite their global reach and resources, businesses must align their internal controls with the specific regulatory expectations of each jurisdiction they operate in [1].

The watchdog pointed to several specific issues with Binance Australia, including high staff turnover, a lack of local resourcing, and limited senior management oversight. These factors, according to AUSTRAC, contributed to deficiencies in the exchange’s AML/CTF governance. Thomas emphasized that businesses must ensure that independent reviews are comprehensive and rigorous, with sufficient testing of key processes to ensure compliance with regulatory obligations [2].

Binance Australia now has 28 days to nominate external auditors for AUSTRAC’s approval. The move reflects a broader regulatory strategy to tighten compliance standards in the digital currency sector. Thomas reiterated that AUSTRAC expects global exchanges operating in Australia to maintain robust customer due diligence, transaction monitoring, and reporting mechanisms. These measures are essential to mitigate the risks associated with large-scale operations, particularly in sectors prone to illicit financial flows [3].

The action against Binance Australia follows a previous regulatory challenge by the Australian Securities and Investments Commission (ASIC), which filed a lawsuit against the firm’s derivatives unit in December 2024 for misclassifying retail clients as wholesale clients. The latest AUSTRAC directive further intensifies regulatory scrutiny of Binance's Australian operations, adding to the ongoing challenges the firm has faced with regulators globally. The firm has previously experienced regulatory warnings and enforcement actions in multiple jurisdictions, including a recent U.S. prison sentence for its founder for money laundering violations [3].

While Binance Australia has acknowledged AUSTRAC’s guidance and stated its commitment to best-in-class compliance, the regulator’s order signals a clear expectation for stronger local controls. AUSTRAC’s approach highlights the importance of aligning global compliance strategies with local regulatory frameworks to address the unique risks posed by digital currencies in different markets. As the exchange moves forward with its mandated audit process, it will need to demonstrate improved governance and risk management to meet Australia’s regulatory expectations [1].

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

[3] Binance Australia Directed to Appoint External Auditor Over Serious Concerns (https://www.coindesk.com/policy/2025/08/22/binance-australia-directed-to-appoint-external-auditor-over-serious-concerns)