AUSTRAC forces Airwallex into special audit amid serious compliance concerns

AUSTRAC has launched a formal investigation into Airwallex and ordered a special external audit over fears its platform may have been used to fund child sexual abuse payments.

The intervention threatens to complicate the fintech’s plans for a multibillion-dollar IPO, expected later this year.

The Melbourne-founded firm was last valued at US$8 billion after raising US$498 million from global investors in December.

“We have particular concerns about people who create fake accounts to push money through for online child sex abuse payments,” said AUSTRAC chief executive Brendan Thomas.

Regulators say they are concerned Airwallex may not have been adequately monitoring transactions or tailoring controls to the risks associated with its size and scale.

The probe has intensified scrutiny on a company that has grown rapidly, reaching US$1 billion in annual recurring revenue in October, according to its own disclosures.

“We are confident that our compliance program is fit for purpose and that necessary controls are in place,” said Airwallex in a company statement.

The company has also faced criticism over its corporate structure and ties to Chinese investors, which it has repeatedly rejected.

Despite the regulatory pressure, Airwallex remains backed by major venture firms including Square Peg, Blackbird and Airtree, as the audit process now unfolds.