Australia's Financial Watchdog Warns Crypto ATM Operators Over Inadequate Anti-Money Laundering Measures

Australia's financial crimes regulator has issued a stern warning to crypto ATM operators, signaling that they may not have sufficient anti-money laundering and counter-terrorism financing measures in place.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) released a statement on Monday, highlighting concerns raised by its crypto taskforce regarding suspicious activities linked to these machines.

Formed in December 2024, AUSTRAC's crypto taskforce has identified troubling trends, including potential links to scams and fraud.

Brendan Thomas, CEO of AUSTRAC, stated that the taskforce, comprising experts in regulation, enforcement, and intelligence, was engaging with businesses in the sector to assess compliance with Australia's financial laws.

"The taskforce has been busy engaging with businesses to understand the risks in their sector and assess their compliance with the law," Thomas said. "It's identified worrying trends and indicators of suspicious activity, including transactions that may be linked to scams or fraud."

AUSTRAC's warning comes as U.S. lawmakers are pushing for tighter regulations on crypto kiosks amid rising fraud cases, many of which involve elderly victims, Decrypt reported.

Crypto ATMs and limited user verification

Crypto ATMs, or kiosks, are machines that allow users to buy or sell cryptocurrencies like Bitcoin using cash or cards, often without requiring the same level of identity verification as traditional financial services.

AUSTRAC's taskforce initially focused on these crypto kiosks but has since expanded its efforts to address broader compliance issues within the industry.

"We want to ensure crypto ATM providers have robust practices to minimize the risk that their machines can be used to launder dirty money or to scam and defraud innocent people," Thomas stated.

Under Australia's Anti-Money Laundering and Counter-Terrorism Financing Act, all Digital Currency Exchanges, including those operating crypto ATMs, must register with AUSTRAC, conduct Know Your Customer checks, monitor transactions, and file Suspicious Matter Reports, along with reports for cash transactions exceeding AU$10,000.

In the Asia-Pacific region, Australia leads with over 1,648 crypto ATMs, a significant increase from 23 in 2019 and 60 in 2022. Sydney alone accounts for 348 of these machines. While crypto ATMs continue to grow in number, most transactions still involve cash deposits to buy Bitcoin.