Australia's financial crime regulator warns cryptocurrency ATM providers that many of these machines may be facilitating money laundering or defrauding victims

Australia's financial crime regulator has issued a warning to cryptocurrency ATM providers, indicating that many of these machines may be facilitating money laundering or defrauding victims.

Australia’s financial crime regulator has issued a warning to cryptocurrency ATM providers, suggesting that many of these machines may be defrauding victims or facilitating money laundering.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) announced on Monday that its cryptocurrency task force, which was launched in December 2024, has identified concerning trends and signs of suspicious activities associated with cryptocurrency ATMs, including links to scams and fraud.

This task force, established to counter the evolving threats posed by cryptocurrency to financial integrity, has been examining the role of cryptocurrency exchange in facilitating illicit activities.

Moreover, the task force is focused on ensuring that businesses operating in the cryptocurrency sector are compliant with Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act.

Announcing the findings of the task force, AUSTRAC CEO Brendan Thomas emphasized the need for sound operating regulations for cryptocurrency ATM providers to minimize the risk of their machines being used for money laundering or defrauding individuals.

“We have identified worrying trends and indicators of suspicious activities, including transactions that may be linked to scams or fraud,” Thomas said, as quoted in the press release.

“The task force has been actively engaging with businesses to understand the risks in their sector and assess their compliance with the law,” added Thomas.

As part of Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act, all Digital Currency Exchanges (DCEs), including those operating crypto ATMs, must register with AUSTRAC and carry out Know Your Customer (KYC) checks, monitor transactions, and file Suspicious Matter Reports, as well as reports for cash transactions exceeding A$10,000.

Currently, Australia has 1,648 cryptocurrency ATMs, the highest number in the Asia-Pacific region, compared to just 23 in 2019, with Sydney alone hosting 348, according to Coin ATM Radar.

Last December, AUSTRAC took action against cryptocurrency ATM providers in Australia who failed to comply with the country’s anti-money laundering regulations.

AUSTRAC’s intelligence has highlighted that they observe cryptocurrency to be high-risk for money laundering, and it is increasingly being used for laundering operations, scams, and illegal activities.

Earlier this year, in February, a group of U.S. senators introduced a new bill for the Crypto ATM Fraud Prevention Act, which aimed to add multiple layers of protection to Bitcoin ATM transactions by improving and increasing transparency in the crypto sector.

The initiative also aimed to decrease the rise in incidents of crypto ATM scams by tightening federal regulations.

Earlier, in August last year, Germany’s Federal Financial Supervisory Authority (BaFin) shut down 13 unlicensed cryptocurrency ATMs from 35 different locations.