Regulators Force Binance to Prove It Can Combat Money Laundering in Australia

AUSTRAC has mandated that Binance Australia appoint an external auditor following significant concerns regarding the platform’s anti-money laundering (AML) and counter-terrorism financing (CTF) controls. The order applies to Investbybit Pty Ltd, the Australian branch of Binance Global, a digital currency exchange registered with AUSTRAC and recognized as the world’s largest centralized crypto platform by transaction volume. The regulatory move underscores AUSTRAC’s broader strategy to address the increasing vulnerability of digital currencies to criminal exploitation, particularly in high-risk sectors. AUSTRAC CEO Brendan Thomas emphasized the need for global crypto operators to align their systems with local AML/CTF requirements, stating that “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.” The agency’s National Risk Assessment 2024 highlights this growing concern, reinforcing the urgency for robust compliance mechanisms.

AUSTRAC’s decision was prompted by several critical issues, including a recent independent review of Binance Australia’s operations that was deemed insufficient given the company’s scale and business model. Additionally, the agency raised red flags about high staff turnover, limited local resources, and inadequate senior management oversight, all of which may compromise the integrity of the exchange’s governance and compliance frameworks. “Businesses need to maximise the value of independent reviews and ensure appropriate testing and review across critical processes and controls,” Thomas said, adding that systems must adapt to regulatory requirements rather than the other way around. The audit, which Binance Australia must initiate within 28 days, aims to verify whether the platform’s AML/CTF measures meet Australian legal standards and effectively mitigate the risk of criminal misuse of its services.

The audit directive adds to a series of regulatory actions targeting Binance in recent years. In December 2023, the Australian Securities and Investments Commission (ASIC) canceled Binance Australia Derivatives’ license after finding that the company misclassified retail users as wholesale clients, circumventing consumer protection laws. ASIC also pursued legal action in 2024 over alleged compliance failures related to the derivatives business. In 2023, Binance and its founder, Changpeng Zhao, reached a $4.3 billion settlement with U.S. regulators over similar AML and sanctions violations. These developments reflect a broader regulatory trend of heightened scrutiny in the crypto space, particularly concerning global platforms operating in high-risk jurisdictions.

AUSTRAC has also flagged the rising risks associated with digital asset ATMs in Australia, including a new A$5,000 limit on cash deposits and withdrawals to curb illicit activity. The regulator is urging all digital currency operators to enhance their transaction monitoring systems to detect suspicious behavior linked to scams, cybercrime, and terrorism financing. “Capacity and risk controls need to correspond to the size of a business and its market presence, particularly as it scales,” Thomas said. The audit process will assess Binance Australia’s ability to meet these expectations and reinforce its commitment to maintaining best-in-class compliance standards. The company has stated it will continue to work closely with AUSTRAC to improve its systems and ensure full alignment with Australian regulatory requirements.

The AUSTRAC decision is part of a global regulatory push to strengthen AML/CTF frameworks in the crypto sector. In May 2024, Canada’s FINTRAC fined Binance CAD$6 million for failing to register as a foreign money services business and for not reporting transactions exceeding CAD$10,000 in virtual assets. The UK’s FCA also ordered Binance to stop regulated activities in 2021 due to non-compliance with AML regulations. These international actions highlight the growing consensus among regulators that digital currency exchanges must adopt stringent compliance measures to prevent abuse by criminal actors. As the crypto landscape continues to evolve, the pressure on platforms to demonstrate robust governance and transparency is expected to intensify.

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/) [4] Binance to appoint external auditor, following Australian watchdog's AML concerns (https://www.mlex.com/mlex/financial-crime/articles/2379944/binance-to-appoint-external-auditor-following-australian-watchdog-s-aml-concerns) [5] AUSTRAC Orders Binance Audit Over Money Laundering Concerns (https://coinpaper.com/10666/austrac-orders-binance-audit-over-money-laundering-concerns) [6] Australia Cracks Down on Binance With External Audit Demand (https://www.cryptotimes.io/2025/08/22/australia-cracks-down-on-binance-with-external-audit-demand/) [7] Australia Orders Binance Audit After Flagging 'Serious Concerns' (https://www.bloomberg.com/news/articles/2025-08-22/australia-orders-binance-audit-after-flagging-serious-concerns?srnd=phx-technology)