Australia AUSTRAC to Get Power to Restrict or Ban Crypto ATMs Amid Money Laundering Concerns

Australia’s government is preparing new legislation that would grant its financial intelligence agency, AUSTRAC, expanded authority to restrict or ban crypto ATMs, as officials grow increasingly concerned about their use in money laundering and financial crime.

Minister for Cybersecurity and Home Affairs Tony Burke announced the plan during a speech at the National Press Club on Thursday, describing the proposal as a necessary step to strengthen oversight of what he called “high-risk products.” The move comes as crypto ATMs surge in popularity across the country, making Australia the third-largest hub for such machines globally.

New Powers to Address “High-Risk” Financial Products

The draft legislation will allow AUSTRAC to impose restrictions or outright prohibitions on products it deems risky, including crypto ATMs. While traditional ATMs have long been targets for fraud, Burke said crypto ATMs present a greater challenge for law enforcement, as funds are significantly harder to trace once converted into digital assets.

“I’m not pretending for a minute that everybody who goes in and uses a crypto ATM is a problem,” Burke said. “But proportionately what’s happening is a significant problem in an area which is much harder for us to trace.”

Burke emphasized that the legislation is not intended to impose a blanket ban but rather to equip AUSTRAC with flexible tools to respond to evolving financial technologies. “We’re not recommending an outright ban, because that might invite legal challenges,” he said. “Instead, we’re giving AUSTRAC the power to restrict or prohibit these devices when necessary.”

Crypto ATMs Boom Amid Oversight Challenges

Australia’s crypto ATM sector has grown exponentially since late 2022, after private companies began rapidly expanding their presence. The country now hosts over 2,000 crypto ATMs, up from just 67 in August 2022. 

Three companies, Localcoin (868 ATMs), Coinflip (682 ATMs), and Bitcoin Depot (267 ATMs), account for more than half of the total machines in operation.

AUSTRAC has already taken steps to tighten regulations, including new operational guidelines and transaction limits introduced in June. Still, Burke said more needs to be done to ensure the agency can keep pace with emerging financial technologies.

“I’m not sure what the next thing is going to be,” Burke said. “There will be times when AUSTRAC may decide on something that doesn’t quite fit that definition but is similar — do they want to ban it or regulate it? That’s why they’ll have this power with respect to high-risk products.”

If passed, the legislation would mark one of Australia’s most significant steps yet toward balancing innovation in financial technology with AML protections.