AUSTRAC has ordered Binance Australia (Investbybit Pty Ltd) to appoint an independent external auditor within 28 days after finding serious gaps in its AML/CTF controls, governance and local oversight that could expose the exchange to illicit money flows.
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AUSTRAC directive: 28 days to nominate an independent external auditor for Investbybit Pty Ltd
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Regulator cited inadequate independent review, high staff turnover and insufficient local management oversight as key failings.
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Related enforcement: past ASIC actions include $13M in customer compensation and a separate $5.1M fine to a different operator.
Binance Australia external auditor: AUSTRAC orders Investbybit to appoint an independent auditor in 28 days; read compliance implications and next steps for investors and operators.
What did AUSTRAC order Binance Australia to do?
AUSTRAC ordered Binance Australia (Investbybit Pty Ltd) to appoint an independent external auditor within 28 days after identifying major deficiencies in anti-money laundering and counter-terrorism financing (AML/CTF) systems. The regulator seeks an external review sized to the platform’s scale and risk profile.
How severe were the AML/CTF deficiencies identified by AUSTRAC?
AUSTRAC described the deficiencies as “serious concerns” affecting crime-prevention systems, including an inadequate independent review that did not match Binance Australia’s scale. The regulator highlighted high staff turnover and weak local management oversight as additional governance risks.
Why did AUSTRAC single out Investbybit (Binance Australia)?
AUSTRAC’s assessment found the exchange’s independent review, local oversight and testing were insufficient relative to its market presence. The regulator warned that global operators must address local money laundering and terrorism financing risks to meet Australian AML/CTF obligations.
What regulatory context and precedent relate to this action?
Australian regulators have recently intensified enforcement: ASIC pursued cases over client misclassification and escrow protections, resulting in approximately $13 million in customer compensation tied to earlier Binance Australia issues. Separately, ASIC fined another operator $5.1 million for unlawful margin trading and warned platforms offering unlicensed leveraged products. These actions reflect broader scrutiny of international exchanges operating in Australia.
How should investors and operators respond?
Investors should verify local compliance and choose providers with robust AML/CTF frameworks. Operators must scale independent reviews, strengthen local governance and reduce staff turnover to maintain effective controls. Regulators expect testing and oversight commensurate with market size and risk.
How can exchanges improve compliance quickly?
Immediate steps include appointing a suitably resourced independent auditor, implementing targeted remediation plans, increasing local senior management oversight, and enhancing transaction monitoring and customer due diligence. These measures align controls with the exchange’s operational scale and threat profile.
Frequently Asked Questions
How long does Binance Australia have to appoint an external auditor?
AUSTRAC has provided a 28-day window for Investbybit Pty Ltd to nominate an independent external auditor for regulatory approval, aiming to address identified AML/CTF and governance deficiencies.
Will this regulatory action lead to penalties?
AUSTRAC’s directive focuses on mandatory remediation via external audit; further enforcement, licensing actions or penalties could follow if remediation is inadequate. Past related enforcement in Australia has included compensation and licence cancellations.
Key Takeaways
- Immediate directive: AUSTRAC ordered a 28‑day appointment of an independent auditor for Investbybit Pty Ltd.
- Primary failings: Inadequate independent review, weak local governance and high staff turnover raised AML/CTF concerns.
- Action items: Investors should verify local compliance; operators must scale reviews, strengthen oversight and remediate monitoring gaps.
Conclusion
AUSTRAC’s directive to appoint an independent external auditor underscores the need for robust local AML/CTF controls and governance at major international exchanges operating in Australia. Binance Australia must address these deficiencies within 28 days or face further regulatory consequences. Market participants should monitor remediation progress and ensure providers meet Australian compliance standards.
Published: 2025-08-25 | Updated: 2025-08-25 | Author/Organization: COINOTAG
