Australian Regulator Warns of Money Laundering and Fraud Risks in Crypto ATMs

The Australian Transaction Reports and Analysis Centre (AUSTRAC) revealed that its digital asset taskforce, launched in December 2024, has begun closely reviewing the role crypto ATMs play in criminal misuse, such as scam facilitation and money laundering schemes. The taskforce noted recurring patterns of activity that deviate from standard financial conduct.

Unlike traditional financial service providers, many crypto ATMs allow transactions with limited verification of customer identity. This feature, while offering convenience, also presents clear risks when exploited by individuals or groups involved in fraud.

Under Australias anti-money laundering laws, all operators of digital currency exchange services, including those who manage crypto ATMs, are required to register with AUSTRAC, verify users through know-your-customer (KYC) procedures, and submit reports on suspicious or high-value transactions.

AUSTRAC has observed that the number of crypto ATMs has expanded rapidly in recent years, with over 1,600 machines now in use across the country. Sydney alone hosts more than 300, making Australia one of the most active markets for such terminals in the Asia-Pacific region.

In response, AUSTRAC has begun engaging with ATM operators to review compliance standards and issue practical guidance. The regulator has also suggested that existing rules may be updated to reflect the evolving risks in crypto infrastructure.

In parallel, several countries have proposed restrictions around crypto ATM usage. U.S. lawmakers in states such as Illinois and Nebraska are considering new legislation requiring transaction limits and mandatory fraud disclosures at kiosks, particularly in light of rising fraud incidents involving elderly victims.

The expansion of crypto ATMs presents a challenge for regulators aiming to strike a balance between innovation and oversight. While the technology may support financial access, authorities stress that accountability and preventive controls must evolve accordingly.