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Australia is considering granting its financial intelligence agency, AUSTRAC, new powers to restrict or even ban cryptocurrency ATMs. This move aims to combat the increasing use of these machines for scams and money laundering, as authorities find them difficult to police. The proposed legislation reflects a growing concern over the illicit activities facilitated by these digital currency kiosks.
Key Takeaways
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Australia's financial watchdog, AUSTRAC, may receive new powers to regulate or ban crypto ATMs.
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The proposed legislation targets the use of crypto ATMs for scams and money laundering.
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Australia has seen a significant increase in crypto ATM adoption, becoming a major hub.
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The government aims to provide AUSTRAC with the tools to manage risks associated with emerging digital assets.
Crackdown on Crypto ATMs
Home Affairs Minister Tony Burke announced that draft legislation is in development to empower AUSTRAC. The agency would be able to restrict or prohibit "high-risk products," with crypto ATMs being a primary focus. Burke highlighted that while not all users of crypto ATMs are problematic, a significant proportion of transactions are linked to illicit activities, making them a considerable money laundering risk.
Rising Crypto ATM Adoption
Australia has experienced a surge in crypto ATM installations, particularly since late 2022. The country now ranks as the third-largest global hub for crypto ATMs, with over 2,000 machines in operation. This rapid growth has outpaced the ability of authorities to effectively monitor and track funds, leading to concerns about their potential for criminal use.
Industry Response and Existing Measures
Representatives from crypto ATM providers, such as Coinflip, argue that existing regulations, including Know Your Customer (KYC) verification and transaction limits, are already in place. They also point to security measures like cameras and blockchain analytics. However, AUSTRAC has previously led crackdowns and implemented new operating rules, indicating ongoing concerns.
Government's Approach
Minister Burke emphasized that the government is not necessarily pushing for an outright ban but intends to equip AUSTRAC with the necessary authority to decide on the best course of action, whether that be restriction or prohibition. This approach aims to provide regulatory flexibility to address evolving risks in the digital asset space and protect consumers and the financial system from criminal exploitation. The proposed powers are seen as a crucial step in legitimizing legitimate digital asset businesses while mitigating the risks posed by bad actors.
Sources
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Australia’s financial watchdog could gain power to ban crypto ATMs, ADVFN Ltd.
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Australia’s financial watchdog could gain power to ban crypto ATMs — TradingView News, TradingView.
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Crackdown on crypto ATMs to tackle scams and money laundering, The Nightly.
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Subscribe to The Australian | Newspaper home delivery, website, iPad, iPhone & Android apps, The Australian.
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