Binance Faces Mandatory Audit in Australia Over ‘Serious’ AML and Terror Financing Concerns

AUSTRAC has directed Binance Australia to appoint an external auditor after identifying “serious concerns” with the world’s largest crypto exchange’s anti-money laundering (AML) and counter-terrorism financing controls.

Investbybit Pty Ltd, Binance’s Australian arm, has 28 days to nominate external auditors for AUSTRAC’s consideration and selection following regulatory engagement across the priority sector.

Global Exchange Fails to Meet Local Compliance Standards

The mandatory audit requirement stems from multiple compliance issues, including Binance’s limited independent review scope relative to its size and business offerings, high staff turnover, and lack of local resourcing and senior management oversight.

AUSTRAC CEO Brendan Thomas emphasized that global operators must understand local money laundering and terrorism financing risks rather than applying generic systems across multiple jurisdictions.

“Businesses can have systems and processes that apply to multiple jurisdictions – but they need to reflect local regulatory requirements. The systems must adapt to the regulatory requirements, not the other way around,” he said.

The action against Binance follows AUSTRAC’s broader crypto enforcement campaign, with authorities targeting 13 remittance and digital currency exchange providers over compliance issues while investigating 50 additional providers.

The agency has cancelled, suspended, and refused renewals for nine providers that failed to meet Anti-Money Laundering and Counter-Terrorism Financing Act obligations.

AUSTRAC Escalates Nationwide Crypto Enforcement Campaign

Australian regulators have dramatically expanded crypto oversight through systematic enforcement actions targeting non-compliant exchanges and money laundering networks.

AUSTRAC established a crypto task force in December to address violations by crypto ATM operators, identifying worrying trends in suspicious activities and transactions linked to scams and fraud.

The agency contacted 427 registered digital currency exchange providers that appear inactive, warning they risk deregistration if they fail to withdraw voluntarily.

Many registered platforms have ceased operations but remain listed, potentially exposing the system to criminal exploitation by bad actors seeking legitimacy.

AUSTRAC plans to launch a publicly searchable register enabling consumers to verify whether crypto exchanges are officially registered and under regulatory scrutiny.

The initiative addresses growing concerns about criminals exploiting legitimate registrations to operate fraudulent platforms.

Additionally, ASIC has ramped up enforcement by shutting down an average of 130 scam websites weekly, disabling over 10,000 malicious platforms, including 7,200 fake investment sites and 1,500 phishing scams.

The regulator recently secured Federal Court approval to wind up 95 companies linked to international “pig butchering” schemes after receiving nearly 1,500 victim claims totaling $35.8 million in losses.

In the process, Melbourne-based exchange Cointree received a $75,120 fine for submitting suspicious matter reports after legal deadlines, with AUSTRAC emphasizing that delayed filings slow police efforts to trace criminal funds.

Complex Money Laundering Networks Target Crypto Conversion

Australian law enforcement agencies have uncovered sophisticated money laundering operations exploiting crypto platforms to convert illicit cash into digital assets.

In June, Queensland Joint Organised Crime Taskforce charged four people over an alleged scheme that moved $190 million through a Gold Coast security company, mixing criminal proceeds with legitimate business income before crypto conversion.

The operation used courier services, complex banking arrangements, and dead drops across multiple Australian cities to collect and transport cash to Queensland.

Authorities restrained $21 million in assets, including 17 properties and multiple vehicles, while executing 14 search warrants across Brisbane and the Gold Coast.

In fact, earlier this month, ASIC charged former barrister Dimitrios Podaridis alongside three other men for facilitating investment scams that converted victim funds into cryptocurrency between January and July 2021.

The scheme utilized fake investment comparison websites and professional documentation mimicking major financial services providers to convince victims to deposit funds before transferring money offshore.

Similarly, European regulators are also considering penalties against OKX after hackers allegedly laundered $100 million in stolen Bybit funds through its Web3 platform.

Authorities debate whether OKX’s integrated services fall under EU Markets in Crypto-Assets regulations, with some recommending permit revocation and operational restrictions.

The enforcement pattern extends internationally, with Binance also facing money laundering investigations in France over alleged violations of anti-money laundering and terrorist financing laws.

French prosecutors claim the exchange assisted habitual money laundering connected to drug trafficking and tax fraud across the European Union, though Binance denies the allegations.

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