Austrac expresses concern relating to Binance Australia governance and compliance matters due to the limited scope of review, staffing issues, and poor anti-money laundering and counter-terrorism financing.

Austrac has issued a grave warning regarding the practices of Binance Australia in terms of compliance and governance, with its latest independent review recording failures in these aspects. The regulator also described the review as being of limited scope, as the exchange is large, risky and has wide business offerings.

Specific problems highlighted by Austrac were mismatched staff turnover, poor local sourcing and insufficient senior management supervision, all of which could undermine well-established governance and anti-money laundering (AML) and counter-terrorism financing (CTF) layers. Brendan Thomas, the CEO of Austrac, emphasized that a global business like Binance needed to have enhanced compliance and governance requirements, where a company of that scale must ensure it has strict customer identification, due diligence, and transaction monitoring measures.

Austrac will approve Binance's nomination of external auditors within 28 days. Matt Poblocki, General Manager of Binance Australia and New Zealand, in a response confirmed that the company was committed to ensuring the strengthening of compliance and governance standards.

This is as a result of a number of global regulatory issues that Binance has been facing. Its founder, Changpeng Zhao (CZ), last year was convicted of AML violations in the U.S. and had to serve a prison sentence. Binance also settled with the U.S. authorities in a $4.3 billion arrangement that included$2.5 billion forfeiture and a $1.8 billion fine.

The recent action highlights the increased efforts by Austrac to impose stronger compliance and governance in the Australian forex market in an attempt to protect financial integrity as the risk of cross-border financial crimes increases.