The leading crypto exchange is currently facing challenges in Australia as the country’s financial crimes agency, Australian Transaction Reports and Analysis Centre (AUSTRAC), ordered an audit into the exchange, pointing out a few significant reasons.
Primarily, Binance has submitted an independent review, which is limited in scope compared to its size, services, and risks. To ensure Binance Australia operates transparently in line with Australian law, AUSTRAC has highlighted a few concerns.
Key regulatory concerns over Binance
- Limited compliance review
- High staff turnover
- Shortage of local resources and oversight
- Risk to financial integrity
Limited compliance review – The independent review submitted by Binance’s latest does not cover all potential risks. The review, which was narrow in scope, did not cover all potential risks like counter-terrorism financing (CTF) and anti-money laundering (AML) obligations. An incomplete review may put AUSTRAC in pain in cases where suspicious transactions occur.
High staff turnover – The financial regulator underscored that Binance Australia frequently changes staff, creating knowledge gaps and hindrances to compliance practices. High workforce churn can also lead to internal instability.
Lack of local resources and oversight – Regulators are worried that insufficient local management could make the exchange non-compliant with rules or delays in reporting.
Risk to financial integrity – Binance handles large volumes of transactions, and weak compliance could impact Australia’s financial ecosystem by increasing the risks of fraud, money laundering, and even terrorist financing.
AUSTRAC directs Binance to appoint an external auditor
Following the exposure, AUSTRAC ordered Binance to appoint an external auditor. According to the regulatory body, its National Risk Assessment 2024 highlighted the “increasing vulnerability of digital currencies to criminal abuse”. Considering these risks ahead, AUSTRAC has been paying attention to Binance as part of its broader regulatory efforts.
But, Binance has an investigation team…
However, Binance Australia has an investigation team committed to protecting users with the help of law enforcement in the country. This is one remarkable X post of the exchange back in January 2024.
During the Australian Crypto Convention in 2023, Binance’s Investigations Specialist, Rob Thomson, explained that the platform closely works with Australian law enforcement to prevent scams, fraud, and illegal activities.
Crypto community responds
Responding to the news, several blockchain experts have commented in different ways. An AI-driven metaverse platform came up with remarks: “Tough hit for Binance, Regulatory pressure in Australia shows compliance standards are tightening across crypto markets.” Meanwhile, another crypto trader wrote that Binance’s troubles in Australia indicate the “ongoing battle between innovation and compliance in crypto.” The community is wondering about how a leading exchange that promotes safety and security can be hooked by a regulatory body of the country.
