Australia’s financial crimes agency, AUSTRAC, has identified serious concerns about the local arm of Binance’s anti-money laundering and counter-terrorism financing (AML/CTF) controls and ordered the company to appoint an external auditor.
The exchange operator now has 28 days to nominate external auditors for the agency’s “consideration and selection.”
Binance Must Follow Local Regulations
The announcement today (Friday) stated that the agency’s concerns were prompted by several issues, including Binance’s latest independent review, which was limited in scope relative to its size, business offerings, and risks.
It also flagged concerns about Binance’s high staff turnover, lack of local resourcing, and weak senior management oversight. These factors raised questions about the adequacy of the company’s AML/CTF governance.
Read more: Australian Regulator Flags Bitget for 125x-Leveraged Crypto Futures Offerings
Brendan Thomas, the CEO of AUSTRAC
“Big global operators may appear well resourced and positioned to meet complex regulatory requirements,” said Brendan Thomas, AUSTRAC’s CEO, “but if they don’t understand local money laundering and terrorism financing risks, they are failing to meet their AML/CTF obligations in Australia.”
Binance is the largest crypto exchange globally in terms of trading volume. It operates in Australia under its local entity Investbybit, which is registered with AUSTRAC as a digital currency exchange provider.
“Businesses can have systems and processes that apply to multiple jurisdictions – but they need to reflect local regulatory requirements,” Thomas added. “The systems must adapt to the regulatory requirements, not the other way around.”
A Wake-Up Call for the Crypto Industry?
He further stressed, without naming Binance directly, that such companies must meet their local reporting obligations.
Richard Teng, CEO of Binance
The agency now expects Binance and other global operators in high-risk sectors involving large transaction volumes to have tighter controls.
“This is a global company operating across borders in a high-risk environment. We expect robust customer identification, due diligence, and effective transaction monitoring,” Thomas said.
“I remind all digital currency exchanges to remain alert to transactions that indicate suspicious behaviour, including money laundering via scams, cybercrime, and terrorism financing – the potential for these activities is much higher for global exchanges,” he added.
Binance’s operations in Australia have faced difficulties before. The Australian Securities and Investments Commission (ASIC) launched a lawsuit against the exchange’s local derivatives arm last year for allegedly misclassifying more than 500 retail investors as wholesale clients, thus denying them crucial consumer protections.
Australia’s financial crimes agency, AUSTRAC, has identified serious concerns about the local arm of Binance’s anti-money laundering and counter-terrorism financing (AML/CTF) controls and ordered the company to appoint an external auditor.
The exchange operator now has 28 days to nominate external auditors for the agency’s “consideration and selection.”
Binance Must Follow Local Regulations
The announcement today (Friday) stated that the agency’s concerns were prompted by several issues, including Binance’s latest independent review, which was limited in scope relative to its size, business offerings, and risks.
It also flagged concerns about Binance’s high staff turnover, lack of local resourcing, and weak senior management oversight. These factors raised questions about the adequacy of the company’s AML/CTF governance.
Read more: Australian Regulator Flags Bitget for 125x-Leveraged Crypto Futures Offerings
Brendan Thomas, the CEO of AUSTRAC
“Big global operators may appear well resourced and positioned to meet complex regulatory requirements,” said Brendan Thomas, AUSTRAC’s CEO, “but if they don’t understand local money laundering and terrorism financing risks, they are failing to meet their AML/CTF obligations in Australia.”
Binance is the largest crypto exchange globally in terms of trading volume. It operates in Australia under its local entity Investbybit, which is registered with AUSTRAC as a digital currency exchange provider.
“Businesses can have systems and processes that apply to multiple jurisdictions – but they need to reflect local regulatory requirements,” Thomas added. “The systems must adapt to the regulatory requirements, not the other way around.”
A Wake-Up Call for the Crypto Industry?
He further stressed, without naming Binance directly, that such companies must meet their local reporting obligations.
Richard Teng, CEO of Binance
The agency now expects Binance and other global operators in high-risk sectors involving large transaction volumes to have tighter controls.
“This is a global company operating across borders in a high-risk environment. We expect robust customer identification, due diligence, and effective transaction monitoring,” Thomas said.
“I remind all digital currency exchanges to remain alert to transactions that indicate suspicious behaviour, including money laundering via scams, cybercrime, and terrorism financing – the potential for these activities is much higher for global exchanges,” he added.
Binance’s operations in Australia have faced difficulties before. The Australian Securities and Investments Commission (ASIC) launched a lawsuit against the exchange’s local derivatives arm last year for allegedly misclassifying more than 500 retail investors as wholesale clients, thus denying them crucial consumer protections.
