Australia May Give AUSTRAC Power to Ban Crypto ATMs Amid Money Laundering Concerns

Australia’s Minister for Cybersecurity and Home Affairs, Tony Burke, has proposed draft legislation that would grant the country’s financial intelligence agency, AUSTRAC, the authority to restrict or ban crypto ATMs considered “high-risk products.”

Speaking at the National Press Club on Thursday, Burke emphasized that the goal isn’t to impose an outright ban on cryptocurrency ATMs, but rather to equip AUSTRAC with the regulatory flexibility to take action if these machines are found to pose significant risks.

“I’m not pretending for a minute that everybody who goes in and uses a crypto ATM is a problem,” Burke said. “But proportionately what’s happening is a significant problem in an area which is much harder for us to trace.”

Crypto ATMs Under Scrutiny

Australia has rapidly become one of the largest markets for crypto ATMs, now ranking third globally with 2,008 active machines, up from just 67 in August 2022, according to data from Coin ATM Radar.

The surge came after private firms aggressively expanded operations, including Localcoin (868 machines), Coinflip (682), and Bitcoin Depot (267) — collectively operating more than half of the country’s crypto ATMs.

Authorities, however, remain concerned that crypto ATMs could be exploited for money laundering and fraud, given the difficulties in tracing digital asset transactions.

In response, a Coinflip spokesperson told Cointelegraph that the industry already follows strict compliance measures, including Know Your Customer (KYC) verification and government-issued ID submission before transactions.

The company noted that AUSTRAC had previously issued operating rules and transaction limits in June and that many machines feature blockchain analytics, real-time scam alerts, and camera monitoring for added security.

“Crypto ATMs are an important bridge between the physical and digital world,” the spokesperson said. “They provide users with a familiar way to access cryptocurrency at a time when traditional ATMs are declining and banks remain cautious toward digital assets.”

Optional Powers for Regulators

Burke clarified that the proposed powers are optional—AUSTRAC would have the discretion to restrict or ban crypto ATMs if necessary, but the government will not directly impose a prohibition to avoid potential legal challenges.

“I’m not sure what the next thing is going to be,” Burke said. “That’s why they’ll have this power with respect to high-risk products.”

The proposal comes as neighboring New Zealand recently banned crypto ATMs as part of its crackdown on illicit cash conversions, signaling a broader regional tightening of crypto oversight.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.