Australian financial regulators have launched a crackdown on cryptocurrency ATM providers amid concerns about inadequate anti-money laundering controls. The Australian Transaction Reports and Analysis Centre (AUSTRAC) has launched a specialized task force to address potential compliance issues in the growing sector. AUSTRAC CEO Brendan Thomas started the internal task force in December. He brought together experts from the agency’s regulatory, enforcement, and intelligence divisions. The group is targeting money laundering and terrorism financing risks associated with crypto ATMs. “The task force has been busy engaging with businesses to understand the risks in their sector and assess their compliance with the law,” Thomas said in a statement. Australia’s growing crypto ATM sector Australia has been at the forefront of cryptocurrency ATM rollouts in the Asia Pacific region. The nation has experienced a massive expansion in the sector, with the number of machines increasing from only 23 in 2019 to 60 in 2022. Presently, there are about 1,600 crypto ATMs in operation in Australia. Statistics from Coin ATM Radar indicate a general spread of these machines across prominent cities in Australia. Sydney takes the lead with 451 crypto ATMs, Brisbane comes in second with 267, and Melbourne follows with 200. There are other concentrations of Perth with 157 ATMs and Adelaide with 97. These machines are found in regional areas as well, but with fewer in cities such as Cairns (16), Townsville (13), and Hobart (12). Source: Crypto ATM Radar The overwhelming majority of transactions made using these ATMs are cash deposits to buy Bitcoin. This cash-to-crypto pipeline has raised specific concerns for regulators because it is hard to track the source of physical currency once it’s in the cryptocurrency system. “We want to ensure crypto ATM providers have robust practices to minimize the risk that their machines can be used to launder dirty money or to scam and defraud innocent people,” Thomas explained. The whole network of cryptocurrencies in Australia is more than just ATMs. According to the statistics, 37,996 crypto ATMs are present worldwide, and Australia has approximately 4.2% of the total. Apart from ATMs, the country has 235,495 other cryptocurrency services on various platforms. This huge network is run by 356 operators and 40 producers across 69 countries. AUSTRAC states various crypto ATM issues AUSTRAC’s cryptocurrency task force has identified several areas of concern in the activity of crypto ATMs throughout Australia. Their investigation has uncovered what the agency calls “worrying trends and indicators of suspicious activity.” They are particularly looking for transactions that involve scams and fraud. The regulator is most concerned with making sure that crypto ATM operators perform efficient anti-money laundering and counter-terrorism financing (AML/CTF) screening. Early findings by the task force suggest that some operators may not have adequate controls in place to prevent their machines from being used for criminal activity. The cash-based nature of crypto ATM transactions poses difficulties for regulation. In contrast to normal bank transfers or credit card payments, injections of cash into crypto ATMs are occasionally harder to track and verify. Thomas reiterated the agency’s pledge to deal with these problems on a dual foundation of industry cooperation and enforcement. “We will continue to work with industry to raise standards, but we will also take action against operators who don’t comply,” Thomas said. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
