Australia’s National Financial Intelligence Agency to Gain Powers to Restrict Crypto ATMs
Australia’s national financial intelligence agency, the Australian Transaction Reports and Analysis Centre (AUSTRAC), is set to receive new powers to restrict or ban crypto ATMs under draft legislation proposed by the country’s Minister for Cybersecurity and Home Affairs, Tony Burke.
During a speech at the National Press Club on Thursday, Burke outlined that the forthcoming legislation would empower AUSTRAC to restrict or prohibit “high-risk products,” explicitly including crypto ATMs. While traditional bank ATMs can also be linked to scams and illegal activities, crypto ATMs pose a greater challenge for authorities trying to track illicit funds.
Burke noted, “I’m not pretending for a minute that everybody who goes in and uses a crypto ATM is a problem, but proportionately what’s happening is a significant problem in an area which is much harder for us to trace.”
Rapid Growth of Crypto ATMs in Australia
Australia was initially slow to adopt crypto ATMs, but the market expanded rapidly toward the end of 2022 as private companies entered the scene. The country now ranks as the third-largest hub for crypto ATMs worldwide, boasting 2,008 machines—up from just 67 in August 2022.
More than half of these crypto ATMs are operated by three major providers: Localcoin with 868 ATMs, Coinflip with 682, and Bitcoin Depot with 267.
Industry Response: Existing Regulations and KYC Processes
Despite concerns from AUSTRAC, some crypto ATM providers argue that adequate regulations are already in place. A spokesperson for Coinflip told Cointelegraph that crypto ATMs undergo strict rules and Know Your Customer (KYC) verification procedures, requiring users to submit valid government-issued identification before transactions.
AUSTRAC has previously conducted crackdowns on crypto ATMs and introduced new operating rules and transaction limits as recently as June.
The Coinflip spokesperson emphasized the growing importance of crypto ATMs, stating, “Crypto ATMs are an important bridge between the physical and digital world, taking cryptocurrency out of the cloud and into the physical world using a familiar experience.”
They added, “As traditional ATMs continue to decline across Australia, interest in cryptocurrency surges, and banks maintain a restrictive posture toward digital assets, the environment is primed for CATMs to thrive.”
New Powers to Be Optional for AUSTRAC
Minister Burke clarified that the government does not intend to enforce an outright ban on crypto ATMs or direct AUSTRAC to take specific action, partly due to concerns that such a move could face legal challenges.
Instead, the legislation aims to give AUSTRAC discretionary power to police emerging technologies like crypto ATMs. “I’m not sure what the next thing is going to be, and there will be times when AUSTRAC may decide on something that doesn’t quite fit that definition but is similar — do they want to ban or do they want to regulate?” Burke explained.
He continued, “How do they want to deal with this? Are there ways of actually avoiding the problem? That’s why they’ll be able to have this power with respect to high-risk products.”
This legislative move positions AUSTRAC to be more agile in responding to potential money laundering risks associated with crypto ATMs and other evolving financial technologies.
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