AUSTRAC Mandates Binance Australia External Audit for Compliance

Australia’s financial regulator, AUSTRAC, has ordered Binance Australia to appoint an external auditor within 28 days. The directive addresses serious deficiencies in the exchange’s AML/CTF controls, as highlighted by recent official statements.

Involved parties include Binance Australia, operating as Investbybit Pty Ltd, and AUSTRAC, led by CEO Brendan Thomas. The audit mandate emphasizes the need for local regulatory understanding, as stated by Thomas.

The directive’s immediate effect is regulatory rather than financial, focusing on compliance than imposing penalties. Binance Australia must now address AUSTRAC’s concerns swiftly, influencing their operational strategies.

Financially, the action has not restricted any assets or imposed capital penalties. This regulatory requirement reflects broader scrutiny across all tokens traded under Binance Australia, including BTC and ETH.

Since the announcement, on-chain data reflects no TVL changes or major liquidity impacts. The external audit is set to assess Binance Australia’s adherence to domestic AML/CTF protocols, aligning with regulations.

“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 AML/CTF obligations in Australia. 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.” – Brendan Thomas, CEO, AUSTRAC Source

Historical precedents highlight similar regulatory interventions against Binance globally. The outcome may impact Binance Australia’s compliance framework significantly, potentially leading to more robust control mechanisms as they align with AUSTRAC’s requirements.