tl;dr
Australia's government is pushing legislation to empower AUSTRAC to restrict or ban crypto ATMs, citing money-laundering risks. With 2,008 ATMs now in the country, regulators face a tightrope walk between innovation and security.
**Australia Eyes Regulatory Power Over Crypto ATMs Amid Money-Laundering Concerns**
Australia’s government is proposing new legislation that would grant its financial intelligence agency, the Australian Transaction Reports and Analysis Centre (AUSTRAC), the authority to restrict or ban cryptocurrency ATMs (CATMs). The move, outlined by Minister for Cybersecurity and Home Affairs Tony Burke during a speech at the National Press Club, aims to address growing concerns over the use of crypto ATMs for illicit activities.
Burke emphasized that while traditional bank ATMs are also exploited for scams and illegal transactions, crypto ATMs pose a unique challenge due to their limited traceability. “I’m not pretending for a minute that everybody who 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,” he stated. The draft legislation would classify crypto ATMs as “high-risk products,” allowing AUSTRAC to impose restrictions or bans if necessary.
Australia’s crypto ATM market has grown rapidly in recent years. Initially a slow adopter, the country now hosts 2,008 crypto ATMs—up from just 67 in August 2022—making it the third-largest hub globally. The majority of these machines are operated by three providers: Localcoin (868 units), Coinflip (682), and Bitcoin Depot (267).
Crypto ATM operators argue that existing regulations already mitigate risks. Coinflip, one of the largest providers, highlighted that users must undergo Know Your Customer (KYC) verification, including presenting government-issued ID, before transactions. The company also pointed to additional safeguards, such as surveillance cameras, blockchain analytics for pre-transaction monitoring, and real-time scam alerts. “Crypto ATMs serve as a bridge between the physical and digital worlds, offering a familiar experience for users,” a Coinflip spokesperson said.
Despite these measures, AUSTRAC has previously enforced crackdowns on crypto ATMs, introducing stricter operating rules and transaction limits in June. The new legislation, however, would expand the agency’s powers to tackle emerging risks. Burke clarified that the government would not push for an outright ban, citing potential legal challenges, but stressed the importance of equipping AUSTRAC with tools to adapt to evolving technologies.
“We don’t know what the next thing will be, and there will be times when AUSTRAC may encounter products that don’t fit the current definition but could pose similar risks,” Burke said. “This power is about giving them the flexibility to address future challenges.”
The debate highlights a broader tension between fostering innovation in the crypto space and safeguarding financial systems from abuse. As Australia’s crypto ATM landscape continues to expand, the balance between regulation and industry growth will remain a critical focus for policymakers.