- Austrac allege to have shortcomings in Binance's anti-money laundering protection.
- Watchdog cites high staff turnover as a key concern.
- Binance has 28 days to nominate an external auditor.
Binance is under the microscope in Australia.
Austrac, the country’s financial crimes regulator, has ordered the crypto exchange to appoint an external auditor after allegedly finding shortcomings in its anti-money laundering and counter-terrorism financing systems.
“Big global operators may appear well resourced … 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 country’s top regulator Brendan Thomas said.
Austrac also flagged concerns with Binance’s high staff turnover, and what it said was a lack of local resourcing and senior management oversight, which raised questions about the adequacy of firm’s financial crime governance.
Binance is the world’s largest cryptocurrency exchange by volume.
The order marks the latest regulatory challenge for Binance. In 2023, US regulators fined the crypto exchange a record penalty of $4.3 billion after Binance failed to prevent criminals, sanctioned entities and other bad actors from using its services.
The company’s founder and former CEO Changpeng Zhao was also sentenced to four months in prison due to those shortcomings.
Binance also faces ongoing legal tax evasion allegations in Nigeria. The trial has been postponed until October. The country’s prosecutors have also accused the exchange of facilitating illegal foreign exchange trading that allegedly devalued the naira, the local currency.
28 days later
Thomas highlighted that Austrac’s National Risk Assessment 2024 noted that digital currencies are increasingly vulnerable to criminal abuse, making strong local safeguards essential.
Matt Poblocki, the general manager of Binance Australia and New Zealand, told Bloomberg that the firm has “engaged openly and transparently with Austrac over the past several months and continue to value their guidance, expertise, and oversight.”
“We remain committed to maintaining best-in-class compliance standards and will continuously enhance our capabilities.”
The order is for Investbybit Pty Ltd, Binance’s Australian legal entity, and a registered digital currency exchange provider.
Binance has 28 days to nominate external auditors for Austrac to consider.
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email atlance@dlnews.com.
