Binance Faces AML Audit Again: What Compliance Risks Exist in the Crypto Industry?
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Binance Faces AML Audit Again: What Compliance Risks Exist in the Crypto Industry?
"This is a global company operating across borders in a high-risk environment. We expect it to conduct rigorous customer identification, due diligence, and effective transaction monitoring."
Navigating Web3 tides with focused insightsAuthor: Fintax
News Overview
In late August 2025, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced it had directed Binance Australia to appoint an external auditor to review its anti-money laundering (AML) program. AUSTRAC stated this decision followed concerns over serious deficiencies in Binance’s AML and counter-terrorism financing (CTF) controls. The regulator also expressed concerns about high staff turnover, lack of local resources, and insufficient senior management oversight—raising questions about whether Binance’s governance over AML/CTF compliance is adequate. Binance Australia has 28 days to nominate an external auditor for AUSTRAC’s consideration and appointment.
Matt Poblocki, General Manager for Australia and New Zealand at Binance, acknowledged AUSTRAC’s decision, adding that the move “is one of their regulatory scrutiny measures, not an enforcement action.” AUSTRAC CEO Brendan Thomas noted that the 2024 National Risk Assessment highlighted growing susceptibility of crypto assets to criminal abuse, and actions against Binance reflect targeted industry regulation: “This is a global company operating across borders in a high-risk environment. We expect rigorous customer identification, due diligence, and effective transaction monitoring.” He emphasized, “All crypto operators must ensure they comply with Australian laws and mitigate associated criminal risks.”
FinTax Brief Commentary
In Australia, entities offering cryptocurrency services must register with AUSTRAC as reporting entities and comply with Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws. A key component of AML/CTF compliance is ensuring that an organization's AML/CTF program—primarily consisting of policies and procedures—undergoes independent review. The independent review report must detail how the entity fulfills its AML/CTF obligations, including management oversight procedures, risk assessments for money laundering and terrorism financing, record-keeping practices, AUSTRAC reporting requirements, and ongoing customer due diligence. It must also assess whether the AML/CTF program has been effectively implemented. Australia’s AML/CTF regulatory framework is primarily based on the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and its amendments, which require relevant entities to conduct independent reviews “periodically,” taking into account the nature and scale of operations, complexity of services provided, and the level of ML/TF risk faced by the business.
According to AUSTRAC’s public press release, the requirement for Binance to undergo external audit stems from AUSTRAC’s concerns regarding the adequacy of Binance’s AML and CTF controls. These concerns arise from multiple factors, including high employee turnover, lack of local resources and senior management oversight, and the limited scope of Binance’s most recent independent review relative to its size, operations, and risk profile. Collectively, these issues have led to compliance shortcomings in Binance Australia’s fulfillment of AML/CTF obligations.
Since the beginning of this year, AUSTRAC has intensified its oversight of cryptocurrency exchanges and taken a series of regulatory or enforcement actions against entities suspected of non-compliance. In May, AUSTRAC fined Melbourne-based exchange Cointree USD 75,120 for delayed submission of suspicious matter reports related to potential money laundering, a delay that hindered timely law enforcement efforts. Previously, AUSTRAC had taken regulatory action against 13 remittance service providers and cryptocurrency exchanges and issued compliance warnings to over 50 entities. On the policy front, the latest amendment to Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006 was passed by parliament in November 2024, with major compliance obligations set to take effect on either March 31 or July 1, 2026, depending on the applicable party. The updated legislation aims to align Australia’s AML and CTF measures with global standards set by the Financial Action Task Force (FATF), expands AUSTRAC’s investigative and enforcement powers, and broadens the regulatory scope to include more crypto-asset-related services to address sector-specific risks. Starting in March 2026, AUSTRAC will require crypto firms to collect user data and report financial transaction information. In July 2025, AUSTRAC released its 2025–2026 regulatory priorities, stating, “This year marks a shift in regulatory approach—from primarily checking compliance to focusing on material risks and harms,” highlighting the crypto sector as a high-risk area of focus.
In this context, AUSTRAC’s AML audit directive to Binance Australia represents one of the latest steps to combat illicit financial activities in the crypto space, reflecting a broader global trend of tightening regulatory scrutiny on cryptocurrency exchanges. Indeed, as governments worldwide increase oversight, the crypto industry’s understanding of compliance is evolving. For crypto businesses, compliance is increasingly seen as an intrinsic competitive advantage, with audit compliance being a critical dimension.
From the case of Binance Australia’s AML audit, crypto firms may benefit from paying closer attention to two areas going forward: first, localised governance. As AUSTRAC CEO Thomas stated in his remarks, “Large global operators may appear well-resourced enough to meet complex regulatory demands, but if they don’t understand local money laundering and terrorism financing risks, they cannot fulfill their obligations when conducting such activities in Australia.” Although Binance holds regulatory approvals or licenses in around 20 jurisdictions, these are not uniformly maintained across all regions, requiring adaptation to each country’s specific regulatory requirements. Regulators tend to favor crypto firms with strong local teams and robust local resources, enabling better understanding of regional market risks and regulatory expectations—critical elements for achieving compliance. Second, audit compliance. With AUSTRAC mandating enhanced audits for Binance Australia, other regulators may introduce similar rules, making “external audit orders” a standard regulatory tool in the crypto sector to ensure crypto firms properly assume their audit compliance responsibilities. Viewed differently, focusing on audit compliance is not merely about avoiding penalties, but about building sustainable business models and strengthening resilience against regulatory challenges.
Looking globally from Australia, countries are striving to build comprehensive and effective crypto regulatory frameworks, accompanied by persistent regulatory uncertainty. Some of this uncertainty translates directly into compliance risks for market participants.
For crypto enterprises, considerations include: (1) Strengthening independent review mechanisms, pre-planning response processes triggered by external audits, and maintaining proper records. Ensure that their AML/CTF programs undergo sufficient independent review, with appropriate testing applied to key processes and controls within those reviews. The frequency and scope of independent reviews should be aligned with business scale, risk levels, and other relevant factors to better match actual needs; (2) Bolstering local resources and enhancing localized governance. Appropriately expand local teams, dynamically fine-tune corporate policies in line with jurisdiction-specific regulatory guidance and enforcement trends, and improve alignment with local regulatory expectations. In short, AUSTRAC’s initiation of an AML audit for Binance Australia highlights that the crypto industry still has room to improve in audit compliance and localised governance—areas closely tied to fostering trust and enabling sustainable innovation within the crypto ecosystem.
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