AUSTRAC (the Australian Transaction Reports and Analysis Centre) has directed crypto exchange provider, Binance Australia, to appoint an external auditor amid anti money-laundering (AML) and counter terrorism financing (CTF) concerns.
AUSTRAC’s 2024 National Risk Assessment underlines the increasing vulnerability of digital currencies to criminal abuse and the action against Binance Australia follows regulatory engagement across this sector.
What caused AUSTRAC’s decision
The regulator’s concerns were prompted by several issues regarding Binance’s latest independent review that was limited in scope relative to its size, business offerings, and risks. At the same time, AUSTRAC also raised concerns with high staff turnover at Binance and a lack of local resourcing and senior management oversights, which may lead to certain AML/CTF suspicions.
To ensure further compliance and appropriate testing and reviews, businesses must maximise the value of independent reviews, which Binance failed to do, according to AUSTRAC. The Australian regulator expects tighter controls from major global operators, particularly those operating in high-risk sectors and involved in large transaction volumes, which is also the case of Binance’s Australian arm, Investbybit Pty Ltd. The company is a registered digital currency exchange provider at AUSTRAC.
Further actions required by Binance
AUSTRAC expects robust customer identification, effective transaction monitoring, and due diligence to comply with local and international AML regulations.
All digital currency exchanges, including Binance, must remain alert to any transactions that might be flagged suspicious such as money laundering via scams, cybercrime, or terrorism financing, and must report these transactions accurately.
Binance Australia has 28 days to nominate an external auditor for AUSTRAC to consider and validate. As previously mentioned, the auditor must be chosen according to the crypto exchanger’s size and transaction volume.
