Binance faces mandatory audits in Australia due to severe anti-money laundering and terrorism financing issues, as AUSTRAC targets 13 cryptocurrency providers in a nationwide enforcement operation.
AUSTRAC has instructed Binance Australia to appoint an external auditor after finding 'serious concerns' regarding anti-money laundering (AML) and counter-terrorism financing controls at the world's largest cryptocurrency exchange.
Binance's Australian subsidiary Investbybit Pty Ltd has 28 days to nominate an external auditor for AUSTRAC's consideration and selection following regulatory engagement in prioritized sectors.
Global Exchange failed to meet local regulatory compliance standards.
The mandatory audit requirements stem from several compliance issues, including limited independent review scope relative to Binance's size and business products, high employee turnover, and lack of local resources and senior management oversight.
AUSTRAC CEO Brendan Thomas emphasized that global operators must understand local money laundering and terrorism financing risks rather than applying a one-size-fits-all system across multiple jurisdictions.
"Businesses can have systems and processes applicable to multiple jurisdictions, but they need to reflect local regulatory requirements. Systems must adapt to regulatory requirements, not the other way around," he said.
The action against Binance was taken following AUSTRAC's broader cryptocurrency enforcement activities, targeting compliance issues with 13 remittance and digital currency exchange providers, while investigating another 50 providers.
The agency has canceled, suspended, and refused to renew the registrations of nine providers that failed to meet obligations under anti-money laundering and counter-terrorism financing laws.
AUSTRAC escalates nationwide cryptocurrency enforcement activities.
Australian regulators have significantly expanded cryptocurrency regulation through systematic enforcement actions targeting non-compliant exchanges and money laundering networks.
AUSTRAC established a cryptocurrency working group in December to address violations by cryptocurrency ATM operators, identifying concerning trends in suspicious activities and transactions related to scams and fraud.
The agency contacted 427 registered digital currency exchange providers that appeared inactive, warning that if they did not voluntarily exit, they could be deregistered.
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, allowing consumers to verify whether cryptocurrency exchanges are officially registered and subjected to regulatory scrutiny.
The initiative addresses growing concerns about criminals using legitimate registrations to operate fraudulent platforms.
Additionally, ASIC has ramped up enforcement, shutting down an average of 130 scam websites per week and disabling over 10,000 malicious platforms, including 7,200 fraudulent investment sites and 1,500 phishing scams.
After receiving nearly 1,500 victim claims totaling USD 35.8 million, regulators recently obtained federal court approval to wind up 95 companies linked to international 'pig butchering' schemes.
In the process, the Melbourne-based exchange Cointree was fined AUD 75,120 for submitting a suspicious matter report after the statutory deadline. AUSTRAC emphasized that delays in submission hinder police efforts to trace criminal funds.
Complex money laundering networks targeting cryptocurrency conversions.
Australian law enforcement agencies uncovered complex money laundering activities using cryptocurrency platforms to convert illegal cash into digital assets.
In June this year, Queensland's Joint Organised Crime Taskforce charged four individuals, accusing them of transferring AUD 190 million through a Gold Coast security company, mixing criminal proceeds with legitimate business income before converting to cryptocurrency.
The operation used courier services, complex banking arrangements, and dead drops across multiple Australian cities to gather cash and transport it to Queensland.
Authorities have restricted assets worth AUD 21 million, including 17 properties and several vehicles, while executing 14 search warrants in Brisbane and the Gold Coast.
In fact, earlier this month, ASIC charged former barrister Dimitrios Podaridis and three other men for assisting in converting victim funds into cryptocurrency investment scams between January and July 2021.
The scheme used fake investment comparison websites and documents mimicking major financial service providers to persuade victims to deposit funds before transferring them overseas.
Similarly, European regulators are also considering penalties against OKX, after hackers allegedly laundered USD 100 million of stolen Bybit funds through its Web3 platform.
There is controversy over whether OKX's comprehensive services fall under the EU's cryptocurrency asset market regulations, with some authorities suggesting license revocation and operational restrictions.
The enforcement model extends internationally, as Binance also faces a money laundering investigation in France for alleged violations of anti-money laundering and counter-terrorism financing laws.
French prosecutors claim the exchange facilitated systemic money laundering activities related to drug trafficking and tax fraud across the EU, but Binance denies these accusations.