According to a legislative draft by Australia's Minister for Cyber Security and Home Affairs, Tony Burke, the Australian national financial intelligence agency will have the authority to restrict or ban cryptocurrency ATMs.
Burke stated during a speech at the National Press Club on Thursday that the legislative draft would empower the Australian Transaction Reports and Analysis Centre (AUSTRAC) to limit or prohibit "high-risk products," which include cryptocurrency ATMs.
While regular bank-operated ATMs are also used for scams and illegal activities, Burke noted that authorities have had limited success in regulating and tracking illegal funds concerning cryptocurrency ATMs and are concerned about their money laundering risks.
Australia was initially a slow market for cryptocurrency ATMs, but adoption has grown exponentially since late 2022 when private companies began entering the market in large numbers. The country is now the third-largest center for cryptocurrency ATMs, with 2,008 machines, a significant increase from 67 in August 2022.
More than half of Australia's cryptocurrency ATMs are operated by three providers: Localcoin with 868 machines; Coinflip with 682 ATMs; and Bitcoin Depot with 267.
A spokesperson for Coinflip stated in a statement to Cointelegraph that cryptocurrency ATMs are already subject to strict regulations and Know Your Customer (KYC) verification, including the submission of valid government-issued identification before any transaction.
AUSTRAC has previously conducted multiple crackdowns on cryptocurrency ATMs and introduced new operational rules and transaction limits in June.
Coinflip stated that these machines are equipped with cameras, pre-transaction monitoring through blockchain analysis, and real-time fraud alerts to help curb bad actors.
"Cryptocurrency ATMs are an important bridge between the physical and digital worlds, bringing cryptocurrency from the cloud to the physical world through a familiar experience," the spokesperson said.
Burke indicated that the government would not push for a complete ban on these machines or recommend an action plan for AUSTRAC, as this could lead to "legal challenges."
However, he intends to grant "them the power to restrict or ban these devices," so the agency has the tools to regulate new technologies.
"I'm not sure what the next thing will be; sometimes AUSTRAC may make decisions on things that don't fully fit that definition but are similar. Do they want to ban it or regulate it?" Burke said.
"How do they want to handle this issue? Is there a real way to avoid the problem? That's why they are able to have this power over high-risk products," he added.
Related: Bank of England Deputy Governor says stablecoin restriction plans are temporary
Original: “Australian financial regulator may gain power to ban cryptocurrency ATMs”
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