Regulation of Cryptocurrency ATMs in Australia
In a proactive response to the rising incidents of scams and fraudulent activities linked to cryptocurrency ATMs in Australia, the financial intelligence body AUSTRAC is instating rigorous new regulations for operators of these machines. This decision follows a taskforce led by AUSTRAC that highlighted disturbing patterns concerning compliance and the exploitation of these ATMs for illegal purposes.
Findings of the Taskforce
Brendan Thomas, the CEO of AUSTRAC, revealed that over a period of months, authorities have noticed troubling data associated with the activities of users that strongly indicate illegal financial dealings.
“Our taskforce’s findings reveal that a significant number of transactions involving cryptocurrency ATMs are tied to scam or fraud-related activities,”
he stated.
Demographic Insights
A concerning trend that emerged from their investigations is the prevalent use of crypto ATMs by individuals aged between 60 and 70. Analysis from nine different crypto ATM providers revealed that nearly 72% of all transaction value comes from users over the age of 50, with those aged 60 to 70 accounting for 29% of this total. This demographic’s vulnerability has prompted AUSTRAC to take decisive action.
New Regulatory Measures
New regulations will impose specific conditions on ATM operators, such as:
- Enforcing cash transaction limits of $3,246 (AUD $5,000) for both deposits and withdrawals.
- Heightened requirements for customer due diligence.
- Mandatory warnings regarding potential scams.
- Enhanced mechanisms for transaction monitoring.
While these cash limits are directly applicable to crypto ATM services, AUSTRAC anticipates that cryptocurrency exchanges accepting cash transactions will adopt similar restrictions to mitigate risks associated with money laundering and terrorism financing.
Educational Initiatives
Alongside these regulatory changes, the Joint Policing Cybercrime Coordination Centre (JPC3), headed by the Australian Federal Police (AFP), is developing educational resources aimed at raising awareness about common scams. These materials, detailing how scams operate and the indicators of fraudulent schemes, are being distributed strategically near crypto ATMs to inform and protect potential victims.
Enforcement Actions
AUSTRAC’s withdrawal of registration for the crypto ATM operator Harro’s Empires underscores the seriousness of these concerns. This action highlights the agency’s commitment to enforcing accountability within the sector, serving as a cautionary message to other cryptocurrency exchange providers regarding compliance expectations under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act.
The Growth of Crypto ATMs
The rapid expansion of crypto ATMs across Australia—from just 23 installations in 2019 to over 1,800 at present—has amplified the urgency for these enforcement measures. AUSTRAC estimates that there will be nearly 150,000 annual transactions, facilitating around $178.5 million, largely propelled by cash deposits for acquiring digital currencies such as Bitcoin, Tether, and Ethereum.
Ongoing Vigilance
AUSTRAC has committed to ongoing vigilance of the crypto ATM landscape and has indicated its readiness to take additional measures as deemed necessary to shield the public from potential harm. Those who suspect they may have fallen victim to scams are encouraged to report their experiences to law enforcement through platforms such as Reportcyber and Scamwatch.
