Australia’s National Financial Intelligence Unit will be given powers to restrict or ban cryptocurrency ATMs under new legislation being developed by the country’s Cybersecurity and Home Affairs Minister Tony Burke.
Speaking at the National Press Club on Thursday, Mr Burke said the bill would give the Australian Trade Reporting and Analysis Center (AUSTRAC) powers to restrict or ban “high-risk products”, including virtual currency ATMs.
Burke said regular ATMs operated by banks are also used for fraudulent and illegal activities, but in the case of crypto ATMs, authorities have been less successful in clamping down on and tracking illicit funds and are concerned about the risk of money laundering.
“I’m not for one moment saying that everyone who goes to a crypto ATM and uses it is a problem, but proportionately, what’s happening is a significant problem in an area that’s much harder for us to track.”
Australia was initially a slow market for crypto ATMs, but as private companies began to enter the market, adoption increased rapidly near the end of 2022, and Australia is now the third largest hub for crypto ATMs, with 2,008 locations up from 67 in August 2022.
Crypto ATM providers claim the rules are already in place
More than half of Australia’s crypto ATMs are operated by three providers. Localcoin has 868 units in its stable version. Coinflip, 682 ATMs. and Bitcoin Depot, 267.
In a statement to Cointelegraph, a CoinFlip spokesperson said that crypto ATMs are already subject to strict regulations and Know Your Customer (KYC) verification, which includes providing a valid government-issued ID before making a transaction.
AUSTRAC has previously led several crackdowns on virtual currency ATMs, introducing new operating rules and trading restrictions in June.
The machine also has other safety measures in place
Coinflip also said these machines are equipped with cameras, pre-trade monitoring with blockchain analysis, and real-time fraud alerts to curb fraudulent activity.
Related: New Zealand bans virtual currency ATMs in crackdown on criminal cash conversion
“Crypto ATMs are an important bridge between the physical and digital worlds, using a familiar experience to bring cryptocurrencies from the cloud into the physical world,” the spokesperson said.
“As traditional ATMs continue to decline across Australia, interest in cryptocurrencies grows and banks maintain a restrictive stance towards digital assets, the environment is ripe for CATM to thrive.”
New permissions will be optional
Mr Burke said the government would not seek a complete ban on the machines or recommend any course of action to AUSTRAC, as this could lead to a “legal challenge”.
But he intends to give authorities “the power to restrict or ban those devices,” giving authorities the tools to police new technologies in the way they choose.
“We don’t know what’s going to happen next. It could be that AUSTRAC decides something that doesn’t fit that definition but is close to whether they want to ban or regulate,” Burke said.
“How do they want to deal with this? Is there a way to actually get around the problem? That’s why they can have this power on high-risk products,” he added.
magazine: Abundant, isolated and stunning beaches: Perth Crypto City Guide