Australia Moves to Grant AUSTRAC Expanded Powers to Combat Illicit Crypto ATM Use

Government Targets High-Risk Crypto ATMs

Australia's Home Affairs Minister, Tony Burke, has announced plans to introduce new legislation aimed at expanding the powers of the country's financial intelligence agency, the Australian Transaction Reports and Analysis Centre (AUSTRAC). The proposed changes will enable AUSTRAC to restrict or, if deemed necessary, prohibit 'high-risk products,' with cryptocurrency ATMs explicitly identified as a primary target. The announcement was made this week during a speech at the National Press Club, highlighting growing concerns over the illicit use of these machines.

Minister Burke emphasized that while not all users of crypto ATMs engage in wrongdoing, the proportion of illicit activity is significant and difficult for authorities to trace. He stated, 'I want AUSTRAC to have the power to restrict, or if it decides to prohibit, high-risk products, and be in no doubt crypto ATMs are a high-risk product.'

Surge in Crypto ATM Numbers and Associated Risks

The regulatory push comes amid a rapid increase in the number of crypto ATMs across Australia. Six years ago, there were only 23 such machines; today, that number has surged to approximately 2,000, positioning Australia as the third-largest market globally for crypto ATM density.

AUSTRAC and law enforcement agencies have linked crypto ATMs to a range of serious financial crimes, including:

• Money laundering
• Fraud and scams
• Illicit drug trade
• Child exploitation

Brendan Thomas, CEO of AUSTRAC, underscored the heightened risks, noting that 'crypto transactions are becoming integrated into money laundering methodologies and crypto ATMs present even more risks due to the ability to turn cash into digital currency that can be sent instantly and virtually anonymously across the globe.'

Protecting Vulnerable Australians from Scams

A significant concern driving the proposed legislation is the exploitation of crypto ATMs by scammers targeting vulnerable individuals. AUSTRAC's analysis revealed that among the most prolific crypto ATM users, 85% were either victims of scams or acting as 'money mules,' coerced into moving illicit funds.

Data indicates that people aged 50 to 70 constitute the largest demographic using crypto ATMs, accounting for nearly 72% of transaction value. This age group is also identified as particularly susceptible to scams. The prevalence of cash-to-crypto transactions through these machines creates a loophole, making it challenging for law enforcement to trace the origin and destination of funds.

AUSTRAC's Enhanced Authority and Global Context

The forthcoming legislation will amend Australia's Anti-Money Laundering and Counter-Terrorism Financing Act, granting the AUSTRAC CEO the authority to adapt more responsively to evolving financial crime risks. This new power complements existing measures, which include a $5,000 Australian dollar cash deposit limit per transaction, enhanced customer verification, and mandatory anti-scam warning notices at machine locations.

Australia's move aligns with a global trend towards stricter oversight of crypto ATMs. In July, New Zealand announced plans to ban crypto ATMs, and in August, Illinois in the U.S. introduced legislation requiring operators to register with state regulators and implement robust compliance programs. While Minister Burke has not confirmed a nationwide ban, he stated that AUSTRAC would be ready to utilize the new powers immediately if the law is passed by Parliament.