The national financial intelligence agency of Australia is set to gain authority to limit or ban crypto ATMs due to upcoming draft legislation from Minister for Cybersecurity and Home Affairs, Tony Burke.
During a speech at the National Press Club on Thursday, Burke stated that the draft legislation would empower the Australian Transaction Reports and Analysis Centre (AUSTRAC) to restrict or prohibit “high-risk products,” including crypto ATMs.
While traditional bank ATMs are also implicated in scams and illegal activities, Burke noted that authorities face challenges in effectively policing and tracking illicit funds related to crypto ATMs, raising concerns about their potential for money laundering.
“I’m not saying for a moment that everyone using a crypto ATM is causing problems, but the scale of the issues is significant in a sector that we find much harder to trace.”
Australia was previously slow to adopt crypto ATMs, but following an influx of private companies, the number surged near the end of 2022, making the country the third-largest global hub for crypto ATMs, boasting 2,008, a rise from just 67 in August 2022.
Crypto ATM provider claims existing regulations
Over half of Australia’s crypto ATMs are managed by three firms: Localcoin with 868 ATMs; Coinflip with 682 ATMs; and Bitcoin Depot with 267.
A spokesperson for Coinflip told Cointelegraph that crypto ATMs already comply with stringent regulations and Know Your Customer protocols, requiring users to present valid government-issued ID before any transaction.
AUSTRAC has previously conducted numerous crackdowns on crypto ATMs and, in June, introduced new operating guidelines and transaction limits.
Additional safety measures in place
Coinflip also mentioned that the machines are equipped with cameras, pre-transaction monitoring through blockchain analytics, and real-time scam warnings to deter misconduct.
Related: New Zealand bans crypto ATMs in crackdown on criminal cash conversions
“Crypto ATMs serve as a crucial link between the physical and digital realms, bringing cryptocurrency out of the digital sphere and facilitating transactions in a familiar manner,” the spokesperson explained.
“As traditional ATMs decline in numbers across Australia while interest in cryptocurrency rises, and banks maintain restrictive stances toward digital assets, the conditions are favorable for crypto ATMs to prosper.”
New powers will be discretionary
Burke noted that the government does not seek to impose an outright ban on the machines or dictate AUSTRAC’s actions, as this could lead to a “legal challenge.”
Nonetheless, he aims to provide “them with the authority to restrict or ban those devices,” equipping the agency with the necessary tools to regulate emerging technologies as deemed fit.
“I’m uncertain what might come next, and there may be instances where AUSTRAC decides on cases that don’t strictly fit that description, but are similar. The agency will need to consider whether to ban or regulate,” said Burke.
“How do they want to approach this? Are there approaches to mitigate the issue? This is why they will have the power regarding high-risk products,” he added.
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