• The regulator has ordered Binance Australia to appoint an external auditor.
• The watchdog cited weak oversight and high compliance risks.

Australia’s financial crime watchdog has directed Binance’s local unit to appoint an external auditor after identifying weaknesses in its anti-money laundering and counter-terrorism financing (AML/CTF) program.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) said its review raised concerns about limited independent audits, inadequate governance, and high staff turnover at Binance Australia.

The regulator also highlighted the absence of sufficient local management oversight. AUSTRAC chief executive Brendan Thomas said the National Risk Assessment 2024 showed digital currencies were increasingly exposed to criminal abuse.

“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 said.

“AUSTRAC is committed to working with industry to ensure strong safeguards are in place to make it harder for criminals to move and conceal illicit funds using digital currencies.”

See Related: JPMorgan Weighs Lawsuit Against Consumer Watchdog Over Fraud Probe

Binance Responds To Order

Binance’s Australian arm said it would comply with the directive. “Binance Australia acknowledges AUSTRAC’s decision to appoint an external auditor to independently review our anti-money laundering program,” commented Matt Poblocki, the company’s general manager for Australia and New Zealand, for Reuters.

The exchange has 28 days to nominate an auditor for AUSTRAC’s approval. The audit order adds to Binance’s regulatory challenges in Australia. In December, the corporate watchdog filed a lawsuit against its derivatives arm, alleging it misclassified retail clients as wholesale investors.

AUSTRAC warned that major global operators must adopt more rigorous checks. “Capacity and risk controls need to correspond to the size of a business and its market presence, particularly as it scales,” Thomas said, adding that firms should stay alert to suspicious transactions linked to scams, cybercrime, and terrorism financing.

The post Binance Australia Faces Audit Over Money Laundering Concerns appeared first on The Distributed.