The national financial intelligence agency of Australia would gain the authority to limit or prohibit crypto ATMs under draft legislation proposed by Tony Burke, the country’s minister for cybersecurity and home affairs.
Burke stated during a speech at the National Press Club on Thursday that this draft legislation would empower the Australian Transaction Reports and Analysis Centre (AUSTRAC) to restrict or ban “high-risk products,” which encompass crypto ATMs.
Although traditional bank ATMs are also misused for scams and illegal activities, Burke highlighted that authorities have limited success in monitoring and tracing illicit funds via crypto ATMs, raising concerns about their potential for money laundering.
“I’m not suggesting for a second that everyone using a crypto ATM is a problem, but proportionally what’s occurring is a significant issue in an area that is much harder for us to trace.”
Initially, Australia had a slow uptake of crypto ATMs, but adoption soared towards the end of 2022 after private companies flooded the market. The country is now the third-largest hub for crypto ATMs, with 2,008 machines, rising from 67 in August 2022.
Crypto ATM provider claims existing regulations suffice
Over half of the crypto ATMs in Australia are managed by three companies: Localcoin, boasting 868 ATMs; Coinflip, with 682 ATMs; and Bitcoin Depot, operating 267.
A representative from Coinflip stated to Cointelegraph that crypto ATMs already comply with rigorous regulations and Know Your Customer verification, which mandates valid government-issued identification for transactions.
AUSTRAC has previously conducted multiple crackdowns on crypto ATMs and introduced new operational rules and transaction limits in June.
Machines feature additional safety protocols
Coinflip claimed that these machines are equipped with cameras, pre-transaction monitoring through blockchain analytics, and real-time scam alerts to mitigate fraudulent activity.
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, taking cryptocurrencies out of the digital sphere into a familiar real-world context,” the spokesperson added.
“As traditional ATMs decline in Australia, interest in cryptocurrency is on the rise, and banks remain cautious towards digital assets, the situation is ripe for CATMs to flourish.”
New powers will be discretionary
Burke mentioned that the government will not advocate for a complete ban on these machines or impose a mandatory course of action for AUSTRAC to avoid potential “legal challenges.”
Nevertheless, he plans to grant “them the authority to restrict or prohibit these devices,” equipping the agency with the means to monitor new technologies as needed.
“I’m uncertain what the next step will be, and there may be instances where AUSTRAC opts for a decision that doesn’t entirely align with the definition, but is similar. Do they prefer a ban or regulation?” Burke questioned.
“How do they want to address this? Are there ways to circumvent the problem? This is why they will have this power regarding high-risk products,” he emphasized.
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