After facing significant challenges with money laundering accusations in the U.S. that led to the resignation of its former CEO Zhao Changpeng (CZ), the cryptocurrency exchange Binance is once again under scrutiny, this time in Australia.
Binance's anti-money laundering and counter-terrorism financing controls have come under fire.
Australia's financial intelligence agency, the Australian Transaction Reports and Analysis Centre (AUSTRAC), has requested that Binance's local branch appoint an external auditor due to 'serious concerns' regarding its anti-money laundering (AML) and counter-terrorism financing (CTF) controls.
AUSTRAC's concerns stem from a recent independent review of Binance's operations in Australia, which stated that its scope is 'limited relative to its size, business products, and risks.'
The agency highlighted several issues present at the exchange, such as high employee turnover, insufficient local resources, and inadequate oversight from senior management.
AUSTRAC emphasized in a statement the need to establish robust systems that comply with local regulatory requirements, especially considering the global nature of exchange operations.
AUSTRAC CEO Brendan Thomas emphasized the importance of effective customer identification, due diligence, and transaction monitoring in high-risk environments. Thomas stated:
This is a global company operating across borders in a high-risk environment. We expect it to have robust customer identification, due diligence, and effective transaction monitoring capabilities.
Global regulatory challenges.
Binance has 28 days to nominate an external auditor to address these issues. In response, Binance Australia's and New Zealand's General Manager Matt Poblocki stated that the exchange has been maintaining open and transparent communication with AUSTRAC in recent months.
Executives at the exchange assured stakeholders and users in the country that the company is committed to maintaining high compliance standards and enhancing its capabilities.
Binance was founded in 2017 and quickly rose to become the largest cryptocurrency exchange by trading volume globally. However, its journey has not been without its difficulties.
Zhao initially operated in China before expanding the company's operations to international markets due to crackdowns by Chinese authorities on the cryptocurrency industry. Despite Binance's rapid growth, it still faces allegations of laundering money for criminal organizations in multiple countries.
Changpeng Zhao admitted to violating U.S. anti-money laundering laws at the end of 2023 and was sentenced to four months in prison in 2024. However, according to Bitcoinist, despite being banned from running the exchange, Zhao may be seeking a pardon from pro-cryptocurrency President Donald Trump.
As global regulators increasingly focus on ensuring compliance, these legal challenges have intensified scrutiny on Binance, and with the appointment of new CEO Richard Teng, the exchange has taken a new direction.
Despite the recent stringent scrutiny from the Australian Transaction Reports and Analysis Centre, Binance's native token BNB still reached an all-time high of $882 last Friday. Over the past month, despite the overall market's lackluster performance, BNB has continued to surge.
