The Australian financial intelligence agency AUSTRAC has formally ordered Binance Australia to appoint an external auditor after uncovering serious shortcomings in the exchange’s anti-money laundering (AML) and counter-terrorism financing (CTF) controls.
In a statement released Friday, the Australian Transaction Reports and Analysis Centre (AUSTRAC) said the decision followed a series of risk reviews and oversight concerns.
It emphasized that Binance, as a global crypto operator, must demonstrate stronger governance, customer due diligence, and compliance infrastructure in a “high-risk environment.”
This latest action from AUSTRAC is not an enforcement penalty - yet - but signals intensifying regulatory scrutiny over how crypto exchanges operate in Australia, particularly in relation to financial crime risks.
Serious Concerns Over AML/CTF Controls
AUSTRAC stated it had identified “serious concerns” with Binance Australia’s compliance systems related to customer identification, due diligence, and transaction monitoring - core components of AML/CTF obligations under Australian law.
“This is a global company operating across borders in a high-risk environment,” said AUSTRAC CEO Brendan Thomas. “We expect robust customer identification, due diligence, and effective transaction monitoring controls to be in place to prevent criminal exploitation.”
The regulator also flagged significant internal issues at Binance Australia, including:
- High staff turnover
- Lack of senior management presence in Australia
- Insufficient local compliance resourcing
These deficiencies raise questions about Binance’s operational readiness to manage AML/CTF risks in line with Australian regulatory expectations.
Binance Responds: Audit Not an Enforcement Action
In response, Matt Poblocki, Binance’s general manager for Australia and New Zealand, acknowledged AUSTRAC’s directive. He described it as part of the agency’s supervisory review measures and stressed it was “not an enforcement action.”
“Binance Australia acknowledges AUSTRAC’s decision and will cooperate fully with the independent audit process,” Poblocki told Cointelegraph. He added that the exchange remains committed to strengthening its compliance systems and cooperating with regulatory authorities.
Despite the diplomatic tone, the audit order is widely seen as a serious reputational setback for Binance in Australia, where the exchange has faced escalating pressure from both financial watchdogs and banking institutions over the past two years.
Escalating Scrutiny from Australian Authorities
AUSTRAC’s audit order comes on the heels of multiple regulatory and legal actions taken against Binance in Australia, particularly from the Australian Securities and Investments Commission (ASIC).
In late 2024, ASIC launched legal proceedings against Binance Australia Derivatives, accusing the exchange of consumer protection violations tied to its classification of users as “wholesale clients.” Wholesale clients are subject to lighter regulatory protections, and Binance had allegedly misclassified retail users to sidestep stricter obligations.
Earlier, in mid-2023, ASIC had raided Binance’s local offices as part of a broader investigation into its now-defunct Australian derivatives platform. That probe resulted in the cancellation of Binance’s derivatives license, effectively removing the firm from the regulated trading market for crypto derivatives in the country.
Banking and Fiat Access Cut Off
Binance’s troubles in Australia have extended beyond regulators to the banking system. In May 2023, Binance was effectively debanked when its local fiat payment partner, Zepto, severed ties under pressure from financial institutions.
The move forced Binance to suspend all AUD (Australian dollar) deposits and withdrawals, leaving users without a direct fiat on- and off-ramp. Binance later said it had received less than 24 hours’ notice before its banking access was cut off - a decision that left thousands of Australian users in limbo.
As of now, the platform still does not support direct AUD bank transfers. The “Bank Transfer” function remains grayed out, displaying a “Channel Suspended” message. Users seeking to withdraw AUD are instead instructed to:
- Convert AUD balances into USDT (Tether) for withdrawal
- Use peer-to-peer (P2P) trading services to convert funds
The persistent loss of fiat access has diminished Binance’s usability in Australia, particularly for newer users and institutions who rely on regulated, seamless payment rails.
Global Context: Binance Under Fire Worldwide
The audit order from AUSTRAC is only the latest regulatory blow for Binance, which has faced a cascade of enforcement actions globally.
In the United States, Binance and former CEO Changpeng Zhao (CZ) pleaded guilty in November 2023 to violating U.S. anti-money laundering laws, agreeing to a $4.3 billion settlement with the Department of Justice, CFTC, and FinCEN. CZ also stepped down and was sentenced to four months in federal prison in 2024.
Other jurisdictions - including Canada, the Netherlands, Nigeria, and the UK - have launched investigations, revoked licenses, or imposed restrictions on Binance’s operations. The company has withdrawn or downsized operations in multiple markets while attempting to pivot toward a more compliant structure.
In response, Binance has hired more compliance professionals, instituted global Know-Your-Customer (KYC) policies, and tried to distance itself from CZ’s leadership era. Still, the lingering distrust from regulators continues to shadow the exchange’s global operations.
What Happens Next in Australia?
Under AUSTRAC’s directive, Binance must now appoint an independent external auditor to assess its AML/CTF framework and submit a comprehensive report to the regulator within a set timeframe. This report will likely detail:
- Customer onboarding and verification processes
- Suspicious transaction monitoring and reporting systems
- Governance and staffing models
- Ongoing compliance with Australian law
Depending on the audit’s findings, AUSTRAC may decide to escalate the matter - potentially imposing fines, enforcement actions, or criminal referrals if serious breaches are identified.
For now, Binance remains under supervisory review - but this could evolve quickly if the audit uncovers deeper issues.
Broader Implications for the Crypto Industry
AUSTRAC’s action highlights a growing global trend: regulators no longer view crypto firms as startups to be tolerated, but rather as financial institutions that must meet the same compliance benchmarks as banks and brokerages.
Australia has positioned itself as a progressive yet strict regulatory environment for digital assets, with agencies like ASIC, AUSTRAC, and the Treasury all engaging in framework development. The country’s AML/CTF Act requires digital currency exchange providers to register, verify customers, and report suspicious activity - rules that AUSTRAC has now shown it is willing to enforce.
Binance’s case could serve as a litmus test for how strictly Australia will regulate global crypto firms, especially those with limited physical presence but wide-reaching digital influence.
The AUSTRAC-ordered audit of Binance Australia marks a critical inflection point for the exchange in one of Asia-Pacific’s most regulated markets. With its fiat access still severed and trust eroding among both users and policymakers, Binance must now demonstrate its commitment to compliance not just in statements, but in structural reform.
As regulators worldwide tighten the screws on crypto operations, exchanges like Binance face a simple reality: those who fail to meet financial crime standards may soon find themselves without a license - or a market.