Australia watchdog orders Airwallex audit over compliance issues

Australia’s financial crime watchdog, AUSTRAC, has ordered an audit of fintech Airwallex Pty amid concerns over potential compliance issues related to anti-money laundering and counter-terrorism financing.

The regulator expressed worries that Airwallex’s transaction monitoring system may not fully address the risks, especially as it facilitates fund transfers across multiple jurisdictions.

AUSTRAC also noted the company has not clearly defined its customer base or reporting obligations.

The agency’s CEO, Brendan Thomas, highlighted concerns about how well Airwallex identifies and reports suspicious activities and oversees these responsibilities.

In response, Airwallex said it will be co-operating fully with AUSTRAC’s requirement that an external auditor review its anti-money laundering and counter-terrorism financing compliance program.

The company added that it welcomes the audit as a transparent opportunity to independently validate its compliance framework.

This article was updated to include a statement from Airwallex.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

The severity and scope of the AUSTRAC-ordered audit remain to be seen

The exact reach of the external audit ordered for Airwallex, under Australia’s anti-money laundering and counter-terrorism financing laws, needs to be spelled out.
The range of possible results is still uncertain, since past AUSTRAC enforcement actions have included enforceable undertakings that require fixes as well as large civil penalties.
The usual timing for these audits, plus any follow-up decisions, should be checked so the likely length of operational uncertainty for Airwallex can be understood.

AUSTRAC’s action could create opportunities for compliance specialists

Regulatory technology (regtech) operators and investors could see short-term demand if other Australian remittance and payment fintechs move to strengthen their compliance frameworks after the Airwallex audit.
Sales could rise for vendors that build anti-money laundering (AML), know-your-customer (KYC), or transaction monitoring software.
Specialized consultants and regtech providers can spot prospects through public sources, including AUSTRAC’s Remittance Sector Register (a public list of registered remittance providers). 1