Australia’s financial intelligence agency, AUSTRAC, could soon gain new authority to restrict or even ban cryptocurrency ATMs under draft legislation being prepared by the government. The proposal comes amid growing concerns that these machines, while increasingly popular, are being exploited for money laundering and scam-related activities.

The legislative plan was unveiled by Minister for Cybersecurity and Home Affairs Tony Burke during a Thursday address at the National Press Club. He explained that the new framework would empower AUSTRAC to designate and restrict “high-risk products,” which would include crypto ATMs, without requiring an outright nationwide ban.

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“I’m not pretending for a minute that everybody who goes in and uses a crypto ATM is a problem,” Burke said. “But proportionately, what’s happening is a significant problem in an area that’s much harder for us to trace.”

Minister for cybersecurity and home affairs Tony Burke is drafting legislation to allow AUSTRAC to ban or restrict crypto ATMs. Source: YouTube

While Australia has historically lagged behind other countries in crypto ATM adoption, the sector has seen rapid growth since late 2022. The country now ranks as the third-largest market for crypto ATMs globally, with 2,008 machines currently operating — a massive leap from just 67 in August 2022.

AUSTRAC Aims to Curb Crypto-Linked Financial Crimes

The Australian Transaction Reports and Analysis Centre has already been active in monitoring crypto activity. Earlier this year, it tightened operational guidelines and imposed transaction limits on crypto ATMs to reduce risks tied to illicit transactions and fraud.

Under the new legislation, AUSTRAC would be able to independently restrict or prohibit the use of crypto ATMs if it determines that the machines pose a heightened financial crime risk.

Burke clarified that the goal isn’t to outlaw crypto ATMs altogether but to ensure regulators have the flexibility to act swiftly. “We’re not recommending an outright ban because that could invite a legal challenge,” he said.

“But we want AUSTRAC to have the power to restrict or ban those devices if necessary.”

Industry Defends Crypto ATMs as Safe and Regulated

Crypto ATM providers have pushed back against the proposal, emphasizing that their machines already adhere to stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) standards.

A spokesperson for Coinflip, one of the largest crypto ATM operators, told Cointelegraph that their machines require users to submit valid government-issued identification before any transaction. They also feature built-in cameras, blockchain analytics tools, and real-time scam alerts to prevent abuse.

“Crypto ATMs are an important bridge between the physical and digital worlds,” the Coinflip representative said. “They allow people to interact with cryptocurrency using a familiar interface. As banks continue limiting access to digital assets, interest in crypto ATMs is only growing.”

The spokesperson added that, despite regulatory scrutiny, crypto ATMs offer “a transparent and compliant way” for consumers to access digital currencies in an increasingly digital economy.