AUSTRAC Crypto ATM Ban: Draft Legislation in Australia
Australia’s national financial intelligence agency, AUSTRAC, could soon gain new regulatory powers over cryptocurrency ATMs under draft legislation outlined by the country’s Minister for Cybersecurity and Home Affairs, Tony Burke. This proposed law aims to address concerns regarding illegal activities and money laundering linked to digital assets, with the AUSTRAC crypto ATM ban proposal at its core. Reporting via Cointelegraph.
Background: Crypto ATMs in Australia
Australia has rapidly become one of the world’s largest crypto ATM markets. Following a surge in deployments led by private firms starting in late 2022, the country now ranks third globally with 2,008 crypto ATMs, compared to just 67 in August 2022. Most of these machines are operated by three companies: Localcoin with 868 ATMs, Coinflip with 682, and Bitcoin Depot with 267. The widespread availability of crypto ATMs has raised regulatory concerns because of the challenges authorities face in tracking illicit transactions.
While traditional ATMs have long faced issues with fraud and crime, Burke noted that crypto ATMs pose significant risks due to the difficulty in tracing digital currency transactions. The AUSTRAC crypto ATM ban draft targets these high-risk products, hoping to curb the potential misuse for money laundering or scams.
Regulatory Context and Operator Reaction
AUSTRAC already oversees compliance and has implemented operating rules and transaction limits for crypto ATMs, with expanded regulations introduced in June. Coinflip, a major operator, emphasized in a statement that their machines employ strict Know Your Customer procedures requiring government-issued identification before use. They highlighted the use of security features such as cameras, blockchain analytics for pre-transaction monitoring, and real-time scam warnings.
In defending the industry’s safeguards, a Coinflip spokesperson stated the machines “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” (Cointelegraph).
Similar concerns have driven regulatory responses in other countries, including a recent ban on crypto ATMs in New Zealand as part of efforts to tackle criminal cash conversions. For broader cryptocurrency regulatory news, see our coverage.
Next Steps and Legislative Uncertainty
Minister Burke clarified that the government does not plan to enforce an outright AUSTRAC crypto ATM ban or set explicit directives for the agency. Instead, the draft law seeks to give AUSTRAC discretionary powers to restrict or prohibit high-risk products as new risks emerge. Burke explained, “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,” referencing the unpredictable evolution of financial technology.
The legislative draft is subject to further discussion, and the precise future of crypto ATM regulations in Australia remains to be determined as authorities balance innovation with anti-money laundering enforcement.
Sources: Cointelegraph
