Rapid Expansion Raises Concerns
The number of crypto ATMs in Australia has grown dramatically from just 23 machines in 2019 to over 2,000 today. This explosive growth has caught the attention of financial regulators who are increasingly worried about the risks these machines present. According to survey data, about 85% of frequent crypto ATM users were either victims of scams or acting as intermediaries for illicit funds. That’s a pretty staggering number when you think about it.
AUSTRAC estimates around 150,000 transactions occur annually through these machines, with a total value of roughly US$275 million. Australia now ranks as the world’s third-largest crypto ATM market, behind only Canada and the United States. What’s particularly concerning to regulators is the demographic breakdown of users. Those aged 50–70 account for nearly 72% of transaction values, suggesting that older Australians who might be less familiar with crypto technology are disproportionately using these services.
New Regulatory Powers
The Australian government is taking concrete steps to address these concerns. The proposed legislation would significantly broaden AUSTRAC’s authority, allowing the regulator to take action against entire categories of high-risk products and services rather than targeting individual operators one by one. This represents a major shift in regulatory approach.
AUSTRAC had already implemented some measures, including capping cash deposits at $3,250 (AUD 5,000) and requiring stronger customer due diligence procedures. They also mandated that scam-warning notices be displayed on the machines themselves. But these measures apparently haven’t been enough to address the scale of the problem.
AUSTRAC CEO Brendan Thomas explained that the new powers would enable more responsive actions against evolving risks, particularly in areas where money laundering remains prevalent. The legislation could potentially allow outright bans on specific crypto ATM services if they’re deemed too risky. That’s a pretty strong regulatory tool, and it shows how seriously the government is taking this issue.
Industry Response and International Context
Not everyone in the crypto industry is happy about these developments. Some industry representatives argue that crypto ATMs already incorporate Know Your Customer (KYC) procedures and that a ban might hinder innovation. They suggest that better enforcement of existing rules might be more appropriate than outright bans.
But regulators are pushing back against this argument, stressing that their primary objective is crime prevention rather than stifling technological development. They point to the survey data showing high rates of scam victimization and illicit activity as evidence that current measures aren’t sufficient.
Australia’s approach isn’t happening in isolation. It mirrors international trends where jurisdictions are increasingly targeting cash-to-crypto channels. Many countries are grappling with how to balance innovation in the crypto space with the need to protect consumers and prevent financial crimes.
The government’s stated goal is to reduce scam exposure, safeguard vulnerable users, and maintain the integrity of the financial system. Whether these new powers will achieve that balance remains to be seen, but it’s clear that crypto ATM operators will need to strengthen their compliance, risk management, and transaction monitoring practices to avoid regulatory action.
