AUSTRAC Orders Binance Audit Over Money Laundering Concerns

The order was made after the regulator flagged serious deficiencies in its Anti-Money Laundering and Counter-Terrorist Financing controls. The move is now one of the latest in a series of longstanding issues for Binance in the country, including previous investigations by ASIC, a canceled derivatives license, and banking partners cutting ties. Meanwhile, in Taiwan, prosecutors indicted 14 people in what they described as the nation’s largest-ever crypto money laundering case, involving more than $70 million and over 1,500 victims. The alleged ringleader, Shi Qiren, faces up to 25 years in prison for orchestrating the scheme.

Binance Faces Audit in Australia

Australia’s financial intelligence agency, the Australian Transaction Reports and Analysis Centre (AUSTRAC), ordered Binance’s local unit to appoint an external auditor due to concerns over its Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) systems. The regulator announced on Friday that it took this step “after identifying serious concerns” with Binance’s compliance measures.

Matt Poblocki, Binance’s general manager for Australia and New Zealand, confirmed that the company acknowledged AUSTRAC’s decision, and explained that the review is a supervisory measure rather than an enforcement action. Nevertheless, the move proved that there is mounting unease about digital asset platforms and their vulnerability to criminal misuse.

Announcement from AUSTRAC 

AUSTRAC CEO Brendan Thomas pointed to the regulator’s risk assessment last year, which shed some light on the growing risks associated with digital currencies, and insisted that firms like Binance must ensure strong customer identification procedures, robust due diligence, and effective monitoring of transactions.

The regulator is also concerned about Binance’s internal operations, and pointed to high staff turnover, a shortage of local resources, and insufficient senior management oversight as issues that may have compromised its governance and compliance controls. This is now yet another chapter in Binance’s troubled relationship with Australian regulators. 

The exchange has been under the spotlight since 2023, when the Australian Securities and Investments Commission (ASIC) searched its offices as part of an investigation into its now-defunct derivatives business. ASIC ultimately canceled Binance Australia Derivatives’ license after concluding that the company misclassified certain users as “wholesale clients,” which allowed them to bypass key consumer protections. ASIC also launched legal action in 2024 over alleged failures tied to the company’s derivatives operations.

Adding to its regulatory woes, Binance faced big banking challenges in Australia. In 2023, its local payment services provider Zepto abruptly stopped supporting the exchange, which forced it to suspend Australian dollar services. Binance later revealed it received less than a day’s notice before being cut off from the banking system, leaving users unable to directly deposit or withdraw AUD. Since then, customers have been advised to either convert their balances to the USDT stablecoin for transfers or use Binance’s peer-to-peer platform. 

For now, the “Bank Transfer” option on the exchange is still suspended.

Taiwan Indicts 14 in Crypto Laundering Scheme

Taiwanese prosecutors also recently indicted 14 people in what is being described as the country’s largest-ever cryptocurrency money laundering case, involving more than 1,500 victims and over $70 million in illicit funds. 

According to reports from local outlet UDN, the Shilin District Prosecutor’s Office brought charges of fraud, money laundering, and organized crime, while seeking to confiscate assets worth nearly $40 million, including $39.8 million in local currency allegedly obtained through fraudulent schemes. Authorities also moved to seize an additional 640,000 USDT, undisclosed amounts of Bitcoin and Tron, more than $1.8 million in cash, two luxury vehicles, and $3.13 million in bank deposits.

Investigators allege the group laundered almost $72 million that was collected from unsuspecting victims. It was then converted into foreign currency and transferred overseas before being used to buy USDT through a Taiwanese exchange, BiXiang Technology. 

Flow chart of the scheme: Source: UDN

Prosecutors released a flow chart of the scheme as part of the indictment to point out the complex operations that were employed to disguise the source of the funds. The investigation dates back to April when all 14 suspects, including alleged ringleader Shi Qiren, were arrested. It is believed that Qiren was central to the scheme, and may face a prison sentence of up to 25 years after refusing to plead guilty.

Authorities claim that since 2024, Qiren, his wife, and a manager surnamed Yang operated a fraudulent business model by opening 40 stores across Taiwan under the names CoinW and CoinThink Technology Co., Ltd. They allegedly posed as the sole firm authorized by the country’s Financial Supervisory Commission and collected millions in franchise fees, as well as cash from deposit machines, ultimately defrauding 1,539 people.

In an unexpected twist, prosecutors mentioned that Qiren himself was defrauded during the scheme by another suspect, who tricked him into paying $93,000 with the false promise of securing anti-money laundering registration.