New Zealand’s Anti-Money Laundering Measures
New Zealand is taking significant measures to strengthen its anti-money laundering (AML) efforts by banning cash-dependent crypto ATMs and imposing a $5,000 limit on international cash transfers. According to the government, these regulations aim to curb money laundering and prevent criminal financial activities.
Government’s Statement
Associate Justice Minister Nicole McKee released these plans in a statement on Wednesday, outlining a comprehensive overhaul of the nation’s strategies against organized crime and terrorism financing.
“This government is focused on cracking down on criminal activities rather than encumbering legitimate enterprises with excessive regulations,”
McKee remarked.
She emphasized the goal of making New Zealand conducive for lawful business operations while complicating the environment for illicit activities.
Legislative Proposals and Police Powers
A forthcoming legislative proposal will enhance the powers of police and regulatory bodies, allowing the Financial Intelligence Unit to access wider financial data on individuals under scrutiny. Additionally, consultations will be initiated regarding a levy to support this enhanced framework.
With the imposition of a $5,000 cap, these reforms specifically target the channels through which criminal entities expeditiously transfer funds overseas, while still enabling compliant international transfers via legitimate banking systems.
Concerns About Crypto ATMs
An April report from the Ministerial Advisory Group on Transnational, Serious and Organised Crime raised alarms about how criminals take advantage of crypto ATMs for swift transactions, such as funding drug trafficking and executing scams.
Industry Reactions
Industry representatives, including Janine Grainger, the co-founder of Easy Crypto—a New Zealand-based cryptocurrency exchange—lauded the initiative, viewing it as a critical step toward legitimizing the crypto sector, which currently includes over 221 ATMs, according to Coin ATM Radar.
Grainger expressed that while the industry has been expanding, ensuring safety and adhering to compliance standards is paramount. She noted that these changes represent a maturation process within the sector rather than a dismantling and primarily affect high-risk scenarios rather than typical users.
On the cost side, she observed that many users are shifting away from crypto ATMs, which often charge steep fees, sometimes reaching as high as 20%.
Arjun Vijay, an exchange founder, remarked on the inevitability of bans on Bitcoin ATMs in multiple jurisdictions without appropriate safeguards such as Know Your Customer (KYC) protocols in place. He also pointed out the high service fees typically associated with these machines, which often discourage cost-conscious users and appeal more to those looking for privacy or converting illicit funds.
Global Trends and Concerns
This crackdown reflects a broader trend of global apprehension regarding the risks linked to crypto ATMs, particularly concerning fraud and money laundering. Recently, Australia’s financial authority, AUSTRAC, issued warnings to the sector after identifying concerning patterns of scams targeting vulnerable populations.
In the United States, Spokane, Washington, has moved to entirely ban crypto kiosks in light of FBI data revealing substantial fraud losses attributable to these machines, amounting to $5.6 billion in 2024.
