Regulators Force Binance Audit Over Money Laundering Fears

AUSTRAC has mandated that Binance Australia, the Australian arm of the global cryptocurrency exchange, appoint an external auditor to address identified deficiencies in its anti-money laundering (AML) and counter-terrorism financing (CTF) controls. The financial intelligence agency raised "serious concerns" over the adequacy of Binance Australia's AML/CTF framework, particularly in light of the exchange’s high transaction volume and cross-border operations [1].

The regulator highlighted that Binance Australia’s most recent independent review was "limited in scope relative to its size, business offerings, and risks." This, coupled with high staff turnover and insufficient local oversight, has raised questions about the strength of its governance and compliance practices. AUSTRAC CEO Brendan Thomas emphasized the importance of aligning global systems with local regulatory requirements, noting that major operators must adapt to the specific risks and legal frameworks of individual markets [2].

Binance Australia, which operates under the parent company Binance Global and is licensed in approximately 20 jurisdictions, has 28 days to nominate external auditors for AUSTRAC’s consideration. The agency expects the auditors to conduct a rigorous review of Binance’s AML/CTF controls, including transaction monitoring, customer identification, and due diligence processes. Thomas stated that such measures are essential to prevent the misuse of digital currencies for illicit activities, including money laundering and terrorism financing [3].

This action is part of a broader regulatory effort by AUSTRAC to strengthen oversight of the cryptocurrency sector. In June 2025, the agency introduced a cap on cash transactions at digital asset ATMs, citing concerns over fraud and scams. These steps reflect growing regulatory scrutiny of crypto exchanges, especially in the wake of global enforcement actions against major platforms. In 2023, Binance and its founder, Changpeng Zhao, reached a $4.3 billion settlement with U.S. regulators over AML and sanctions violations, signaling a trend of intensified enforcement globally [2].

AUSTRAC's intervention underscores the challenges faced by large international firms operating in highly regulated environments. While Binance Australia has publicly affirmed its commitment to compliance, the regulator’s concerns suggest that localized risk management and governance are key to meeting AML obligations. The agency has called for digital currency exchanges to remain vigilant in identifying and reporting suspicious activities, particularly as transaction volumes and operational scale increase.

In response, Binance Australia stated that it has maintained open engagement with AUSTRAC and is committed to enhancing its compliance standards. The external audit process will likely serve as a critical step in addressing the identified weaknesses and demonstrating ongoing compliance with Australian regulatory expectations. The outcome of the audit could have broader implications for the company’s operations in the region and its global compliance strategy.

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