Australia to Crack Down on Non-Compliant Crypto ATMs with New Task Force

Highlights:

• Australian financial intelligence agency intends to target crypto ATMs in the coming year.
• The agency plans to form a new team to oversee crypto ATM providers.
• AUSTRAC warns that rule-breakers may face significant financial penalties.

On December 6, the Australian Transaction Reports and Analysis Centre (AUSTRAC), the country’s financial intelligence agency, announced that it had established an internal task force to crack down on crypto ATMs that fail to comply with anti-money laundering rules. Brendan Thomas, CEO of AUSTRAC, said the agency will focus on the crypto industry starting at the beginning of next year.

Australia’s Crypto ATM Boom: A Regulatory Crackdown Looms

The agency took action after finding that cryptocurrencies have a higher risk of money laundering. They are also being used more for scams and money mule activities. Thomas stated that cryptocurrency and crypto ATMs have become “attractive avenues for criminals.” This is due to their accessibility and ability to facilitate “near-instant and irreversible transfers.”

Australia has about 400 AUSTRAC-registered digital currency exchange providers. However, only a few of these providers manage crypto ATMs. Despite this, the country has 1,300 operating crypto ATMs, the third-highest number globally. The US is the leader with 31,647 Bitcoin ATMs, representing more than 81% of the global market. Canada holds second place with 3,022 crypto ATMs, accounting for 7.8%.

AUSTRAC Sets Strict Standards for Cryptocurrency ATM Operators

Australia’s financial intelligence agency states that all cryptocurrency ATM operators must meet minimum standards. They must have strong practices to prevent scams. The anti-money laundering and counter-terrorism laws require operators to monitor transactions. They must also perform KYC checks on customers. Additionally, operators need to report suspicious activities and submit reports for cash deposits or withdrawals over AU$10,000 (roughly $6,430).

Thomas added: 

“We’re seeing too many Australians falling victim to scams carried out through cryptocurrency, and we’ve heard of some victims losing their life savings, which is just heartbreaking.”

In Australia, those convicted of money laundering can face up to 12 years in prison, fines exceeding $100,000, or both. If the amount laundered exceeds $644,400, penalties can include up to 25 years in prison and fines of up to $214,585, or both.

The recent warning aligns with AUSTRAC’s belief that digital currencies and exchanges pose significant risks for money laundering and terrorism financing. In its National Risk Assessment Report, the agency categorized cryptocurrencies as a “high” risk for enabling illegal activities. It also warned that these risks are expected to grow in the next three years.

Crypto ATM Crackdowns and Growth Potential

AUSTRAC is not the only agency addressing crypto ATMs. Earlier this year, Germany’s BaFin took action against illegal crypto ATMs. They seized €25 million in cash. Last year, the UK’s Financial Conduct Authority shut down 26 illegal crypto ATMs.

Despite the crackdowns, experts believe the cryptocurrency ATM sector has significant growth potential. Scott Buchanan, COO of Bitcoin Depot, highlighted that the global crypto ATM market was worth $182.1 million last year. The market is projected to grow at a compound annual growth rate (CAGR) of 63.4% between 2024 and 2030.