Australia Moves to Tighten Oversight of Crypto ATMs Amid Money Laundering Concerns

The Australian government is preparing a new bill that could potentially give the Australian Transaction Reports and Analysis Centre (AUSTRAC) the power to restrict or ban crypto ATMs. The proposal was announced by Tony Burke, the Minister for Cybersecurity and Home Affairs. The announcement comes during a time of growing concerns about the use of ATMs for illegal financial activities.

AUSTRAC To Handle Decisions on Crypto ATMS

Speaking at the National Press Club on Thursday, Burke said the draft legislation aims to give AUSTRAC the ability to manage “high-risk products,” a category that would include crypto ATMs. While he acknowledged that not all users of crypto ATMs are engaged in wrongdoing, Burke highlighted the government’s struggle to trace illegal transactions in the crypto space, calling it “a significant problem in an area much harder for us to trace.”

Australia has experienced rapid growth in crypto ATM installations since late 2022, when private operators entered the market. The country now ranks as the world’s third-largest hub for crypto ATMs, with over 2,000 machines, up from just 67 two years ago.

The proposed powers have drawn mixed reactions from the industry. Coinflip, one of the country’s largest crypto ATM providers with 682 machines, argued that operators are already subject to stringent Know Your Customer (KYC) regulations. These include mandatory government-issued identification checks before any transaction. The company also pointed to AUSTRAC’s existing oversight, noting that new operational rules and transaction limits were implemented as recently as June.

Coinflip defended the role of crypto ATMs, calling them a “bridge between the physical and digital world.” The company said its machines incorporate blockchain analytics, on-site cameras, and real-time scam alerts to deter bad actors. It argued that as traditional bank ATMs decline and banks continue restricting access to digital assets, consumer demand for crypto ATMs is likely to grow.

Burke emphasized that the new powers would not impose an automatic ban but would give AUSTRAC the discretion to act as needed. “We won’t be recommending a specific course of action because that might trigger legal challenges,” he said. “But AUSTRAC should have the tools to decide whether to restrict or ban these devices when they pose high risks.”

The draft legislation marks the latest step in Australia’s broader push to strengthen cryptocurrency oversight, reflecting a global trend toward tightening financial regulations in the digital asset sector.