Key Highlights
- Minister Tony Burke is drafting laws to grant Australia’s financial intelligence agency, AUSTRAC, the power to restrict or outright ban crypto ATMs
- The move is driven by government concern that crypto ATMs facilitate money laundering and illicit activities that are difficult for authorities to trace
- The legislation follows a massive surge, making Australia the third-largest crypto ATM market globally, with over 2,000 machines.
- The government is not imposing an immediate ban but is giving AUSTRAC the discretion and tools to police the high-risk technology as it deems appropriate.
In a significant move signalling a tougher regulatory stance on digital assets, Australia’s Minister for Cybersecurity and Home Affairs, Tony Burke, recently unveiled a plan to equip the nation’s financial intelligence agency with the authority to police high-risk technologies, specifically targeting cryptocurrency ATMs. The proposed draft legislation does not immediately enforce an outright ban on these machines, but rather delegates the power of restriction or prohibition to the Australian Transaction Reports and Analysis Centre (AUSTRAC). This decision is rooted in growing governmental concern that the rapid proliferation of crypto ATMs presents a substantial, yet increasingly difficult-to-trace, money laundering risk.
Speaking at the National Press Club, Minister Burke detailed the rationale behind granting AUSTRAC these new, discretionary powers. He acknowledged that traditional, bank-operated ATMs are also occasionally exploited for fraudulent and illicit schemes. However, he stressed that when it comes to crypto ATMs, authorities face much greater difficulty in successfully monitoring and tracking down the origin and destination of criminal funds. This tracing gap is the core of the problem. While being careful to state that the vast majority of crypto ATM users are not engaged in illegal activity, the Minister indicated that the proportionate involvement of these machines in serious financial crime is a “significant problem.” For the government, the legislative priority is to close this loophole that allows illicit funds to move with relative impunity and speed.
The timing of this legislative push is critical, coming at a moment when Australia has transformed from a cautious adopter to a global leader in the physical crypto market. Historically slow to embrace the technology, the country saw exponential growth in crypto ATM adoption towards the end of 2022, largely driven by private companies aggressively entering the space. This surge has propelled Australia to become the world’s third-largest hub for these machines, now boasting a count of 2,008 active crypto ATMs, a monumental increase from just 67 recorded in August of that same year. The market is currently dominated by a few key players, with Localcoin operating the largest share (868 machines), followed by Coinflip (682) and Bitcoin Depot (267).
Unsurprisingly, the crypto ATM industry has voiced its defence, arguing that such machines are already subject to stringent oversight. A spokesperson for Coinflip, highlighted to that their operations adhere to rigorous rules, including comprehensive Know Your Customer (KYC) protocols. These rules mandate that every user must submit valid, government-issued identification before they are permitted to conduct any transaction. Furthermore, the industry emphasizes that the machines are far from unregulated black boxes; they incorporate multiple safety and monitoring layers. These layers include built-in cameras, advanced pre-transaction monitoring powered by blockchain analytics, and real-time warnings designed to notify users of known scam patterns, all intended to curb the actions of bad actors.
For the providers, these machines represent a vital utility in the evolving financial landscape. Coinflip’s representative described crypto ATMs as an “important bridge between the physical and digital world,” effectively translating cryptocurrency from an abstract cloud-based concept into a tangible asset accessed through a familiar device. They also argued that the operational environment is uniquely “primed” for the success of these machines. As traditional bank ATMs continue their retreat across Australia and established banks maintain a cautious, often restrictive posture toward digital assets, the public’s surging interest in cryptocurrency necessitates an accessible, physical point of transaction that crypto ATMs fulfil.
Crucially, Minister Burke emphasized that the new powers granted to AUSTRAC would be purely optional. The government is consciously refraining from mandating an immediate ban or recommending a specific course of action to the financial intelligence agency. This measured approach is partly a legal strategy—Burke noted that pushing for an instant, government-dictated ban could potentially provoke a swift and successful “legal challenge.” Instead, the objective is simply to empower the agency with the necessary tools to police technology in the manner it ultimately decides.
This flexibility is central to the draft law’s design. The Minister acknowledged that the government cannot anticipate every future technological development or financial product that might be exploited by criminals. By giving AUSTRAC the broad authority to “restrict or ban” devices designated as high-risk, the agency gains the agility to respond dynamically. Whether they decide to implement a total ban, impose strict regulatory limits, or develop innovative ways to mitigate the risk without outright prohibition, the choice rests with the expert regulator. The core intent is to ensure the financial watchdog is equipped with a versatile toolkit, allowing them to effectively deal with new, high-risk products as they emerge, thereby strengthening Australia’s defences against financial crime and money laundering in the digital age.
