The Australian Transaction Reports and Analysis Centre (AUSTRAC), the country’s financial intelligence agency, is expected to gain authority to restrict or outlaw entire categories of crypto-related services. This shift marks a major departure from current policy, which limits enforcement to specific operators.
Brendan Thomas, AUSTRAC’s chief executive, stated that the additional powers would make it easier to react quickly as new risks emerge. He commented, "We’re seeing misuse on a scale that demands stronger action. This framework would let us act before the harm spreads."
Scams Account for Majority of Crypto ATM Use
According to AUSTRAC data, crypto ATMs are processing approximately 150,000 transactions annually, with a total value of roughly $275 million. However, a concerning trend is evident behind these figures: around 85% of high-volume transactions have been linked to scams or so-called money mule activity, which involves individuals being recruited to move illicit funds.
Authorities are particularly concerned about older Australians becoming victims of these schemes. Nearly three-quarters of the total value transacted through these machines originates from users between 50 and 70 years old, a demographic considered especially vulnerable to sophisticated online frauds.
Rapid Growth, Rising Risk
Once a niche novelty, crypto ATMs have experienced an explosion in popularity across Australia. In a span of just six years, their number has increased from 23 to approximately 2,000, positioning the country as the third-largest market globally, trailing only the United States and Canada.
This rapid growth has attracted regulatory attention as officials aim to close off one of the few remaining avenues for converting cash into cryptocurrency with minimal oversight. The proposed new framework will empower AUSTRAC to suspend or ban ATM services entirely if evidence indicates they pose systemic risks.
Wider Anti-Fraud Push
The government’s latest measures are part of a broader campaign against financial crime. Banks are being granted access to visa and immigration data to aid in tracing networks involved in money laundering operations, with a particular focus on those utilizing foreign students and temporary visa holders as intermediaries.
Additional controls that have already been implemented include a $5,000 AUD cap on cash deposits, enhanced identity verification processes, and mandatory scam alerts displayed on ATM screens.
Industry Divided Over the Crackdown
The cryptocurrency industry has reacted with cautious concern. While many operators support enhanced anti–money laundering safeguards, they contend that most legitimate providers already adhere to Know Your Customer (KYC) standards, utilize surveillance systems, and monitor wallet activity to detect suspicious behavior.
Critics express fears that broad bans could impede innovation and deter new users from entering the crypto ecosystem. One operator commented, "Removing access points like ATMs doesn’t eliminate risk—it just drives users toward less regulated channels."
Impact on Retail Adoption
Analysts suggest that the new approach could significantly alter how Australians engage with cryptocurrency. ATMs have historically served as a straightforward entry point for newcomers, enabling cash purchases without the complexities associated with centralized exchanges. A reduction in their availability might slow down adoption among retail users, particularly those who are less comfortable with online trading tools.
Nonetheless, regulators maintain that the benefits of these measures outweigh the potential drawbacks. With the rise in scams and money laundering activities, the government believes a more stringent stance on cash-to-crypto conversions is essential to maintain trust within the nation’s digital asset ecosystem.
If approved, AUSTRAC’s expanded powers would represent the country’s most substantial cryptocurrency regulatory reform since 2020, shifting the focus from exchanges to the physical locations where cash transactions with crypto occur.