Australia’s financial intelligence unit has ordered Singapore-based Airwallex to review whether the payments giant has violated the nation’s anti-money laundering (AML) laws.
Under the AUSTRAC order, Airwallex’s designated business group must appoint an external auditor to address concerns that the Melbourne-founded company has failed to properly monitor transactions, evaluate its customer risks, and understand what reporting is required to comply with Australia’s AML regime.
“Our concerns also extend to how well Airwallex identifies and reports on suspicious matters and the effective oversight of these important obligations,” AUSTRAC CEO Brendan Thomas said in a statement.
The auditor, which will be appointed under Sec. 162 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, must be hired at Airwallex’s expense to evaluate and report on the company’s AML program within 180 days of appointment, AUSTRAC said. The outcome will inform the regulator on whether further action is required, the agency said.
The probe stems at least in part from concerns that Airwallex may have been exploited for the purposes of child sexual exploitation, The Australian Financial Review reported.
Airwallex, which provides low-cost foreign-exchange services that circumvent the need for SWIFT’s interbank payment rails, has been under “considerable scrutiny for its links to China,” AFR reported. Domiciled in the Cayman Islands, the company is backed Tencent, HongShan Capital, and other major Chinese investors, according to the news outlet.
The company has also seen recent rapid growth, AFR said. “It took Airwallex nine years to reach $US500 million in annual recurring revenue, but only a year to increase that to $US1 billion – a milestone it achieved in October,” the newspaper reported.
Airwallex has denied that its Chinese operations pose security risks, according to the news outlet.
In January of 2024, AFR separately reported that Airwallex founder and CEO Jack Zhang questioned a senior executive whether it was possible to work around Hong Kong’s AML laws.
“Is there a way we can remove the requirement of collecting all shareholders (over 25%) ID in Hong Kong,” Zhang reportedly messaged Airwallex general counsel and chief compliance officer Jeanette Chan on Slack, according to AFR. The company subsequently told the news outlet that the Slack messages it had obtained were “taken out of context in a disingenuous attempt to damage the reputation of one of few Australian-born tech unicorns.”
Read more at AUSTRAC
Read more at The Australian Financial Review