Australia Cracks Down Hard on Binance: Demands External Audit Amid Money Laundering Storm

Regulators drop the hammer on crypto giant as compliance concerns escalate.

THE CRACKDOWN INTENSIFIES

Australian authorities aren't playing nice—they've ordered Binance to undergo a full external audit following serious money laundering allegations. The move signals growing regulatory impatience with crypto's wild west reputation.

COMPLIANCE MEETS REALITY

Watchdogs want transparency now, not promises about future compliance. The audit mandate forces Binance to open its books—a stark contrast to the industry's typical opacity. Traditional finance veterans are probably nodding along with 'told you so' smirks.

THE BIGGER PICTURE

This isn't just about one exchange—it's about setting precedents. Global regulators are watching how Australia handles this, and Binance's response could define crypto compliance standards for years. The industry's mantra of 'move fast and break things' just met regulatory brick walls.

Welcome to adulthood, crypto—where the rules apply to everyone, even billion-dollar platforms that thought they could write their own playbook.

Binance’s AML And CTF Controls Under Fire

The Australian Transaction Reports and Analysis Centre (AUSTRAC), the nation’s financial intelligence agency, has mandated that Binance’s local arm appoint an external auditor due to “serious concerns” about its anti-money laundering (AML) and counter-terrorism financing (CTF) controls.

AUSTRAC’s concerns emerged following a recent independent review of Binance Australia’s operations, which the agency described as “limited in scope relative to its size, business offerings, and risks.”

The agency highlighted alleged issues from the exchange such as high staff turnover, inadequate local resources, and insufficient oversight from senior management. 

In a statement, AUSTRAC emphasized the need for robust systems that align with local regulatory requirements, particularly given the global nature of the exchange’s operations. 

Brendan Thomas, AUSTRAC’s chief executive, stressed the importance of effective customer identification, due diligence, and transaction monitoring in a high-risk environment. Thomas stated:

This is a global company operating across borders in a high-risk environment. We expect robust customer identification, due diligence and effective transaction monitoring.

Global Regulatory Challenges

Binance has been given a 28-day window to nominate external auditors to address these concerns. In response to the situation, Matt Poblocki, the general manager of Binance Australia and New Zealand, stated that the exchange has been engaging openly and transparently with AUSTRAC throughout recent months. 

The exchange’s executives reassured stakeholders and users in the country about the company’s commitment to maintaining high compliance standards and improving its capabilities.

Founded in 2017, Binance has rapidly ascended to become the world’s largest cryptocurrency exchange by trading volume. However, its journey has not been without difficulties. 

After initially operating in China, Zhao moved the company’s operations internationally due to a crackdown on the crypto sector by Chinese authorities. Despite its growth, Binance has faced accusations in multiple countries of facilitating the laundering of funds for criminal organizations.

Zhao pleaded guilty to violating US anti-money laundering laws in late 2023, resulting in a four-month prison sentence in 2024. However, Bitcoinist has reported that despite being banned from taking charge of the exchange, Zhao might be seeking a pardon from pro-crypto President Donald Trump.

These legal challenges have compounded the scrutiny on Binance with the exchange taking a new direction with its new CEO Richard Teng as regulators worldwide increasingly focus on ensuring compliance.

Despite recent scrutiny from Australia’s Transaction Reports and Analysis Centre, Binance’s native token, BNB, reached an all-time high of $882 on Friday. The cryptocurrency has consistently surged over the past month, even as the broader market struggled.

Featured image from DALL-E, chart from TradingView.com