Australia cracks down on crypto ATM providers over anti-money laundering rule compliance

Crypto ATM providers have received a warning from the Australian Transaction Reports and Analysis Centre that those who don’t fully comply with anti-money laundering rules will face legal action.

According to a Mar. 31 press release statement, AUSTRAC’s cryptocurrency task force has found signs of suspicious transactions and fraud, raising concerns about the growing number of crypto ATMs. Since December, the task force has been working with businesses to check if they are following AML and counter-terrorism financing rules. 

AUSTRAC CEO Brendan Thomas issued a warning, saying that although the agency is assisting companies in improving compliance, those who do not adhere to anti-money laundering and counter-terrorism financing regulations will be subject to consequences. 

“We will continue to work with industry to raise standards, but we will also take action against operators who don’t comply.”

— Brendan Thomas, AUSTRAC CEO

Australia now has the largest market in the Asia-Pacific region, with about 1,648 cryptocurrency ATMs, compared to just 23 in 2019 and 60 in 2022. There are 348 machines in Sydney alone. Most accept cash deposits for Bitcoin (BTC) purchases, which raises the possibility that criminals could use them to transfer illicit funds.

According to AUSTRAC, some Australians have lost their entire life savings as a result of the misuse of cryptocurrency ATMs for fraud and scams.

Crypto ATM operators are required to register with AUSTRAC and adhere to AML/CTF regulations, which include transaction monitoring, customer identity verification, and reporting suspicious activity. AUSTRAC has warned that non-compliant companies may be subject to steep fines and has promised to step up enforcement.

This crackdown coincides with a slowdown in the global crypto ATM market due to regulatory pressures. Coin ATM Radar’s latest report shows that over 1,000 Bitcoin ATMs were taken out of service globally in February. The overall number has decreased by 2,062 since late 2022.

With more than 78% of crypto ATMs in operation, the United States leads the global crypto ATM market, followed by Canada with 9.2%. Australia and Europe each account for just over 4% of the global network.