Australia is raising the stakes in its ongoing war against digital currency ATMs, as the country’s Home Affairs Minister Tony Burke announced tougher new rules, while calling the machines a “high-risk product” linked to money laundering, scams and child exploitation.
The new rules, announced on October 15, are part of wider new powers introduced to combat money laundering, terrorist financing and crime risks.
“Australia has the highest number of (crypto) ATMs in the region and the third largest in the world,” Burke said in an October 14 speech to the National Press Club in Canberra. reported by local media ABC News. “Six years ago Australia had 23. Three years ago Australia had 200. Today we have 2,000. It’s grown and grown quickly.”
This exponential increase in recent years has raised concerns about “significant money laundering, terrorist financing and serious crime risks associated with crypto ATMs,” Burke said.
He added that “when they looked at the top users, the top users who put the most money into crypto ATMs, 85% of the money flowing through the top users involved scams or money mules.”
The Home Affairs Minister also highlighted the difficulty of tracing digital currency purchases with cash as a reason why digital currency ATMs have come under particular scrutiny by the Australian government and authorities.
With that in mind, he revealed that the country’s leading financial crime agency, the Australian Transaction Reports and Analysis Center (AUSTRAC), would gain new powers under upcoming legislation to target digital currency ATMs.
Burke did not specify what these new powers would entail, or whether they would include an outright ban on digital currency ATMs, but he did say they would give AUSTRAC the power to restrict or ban “high-risk products”.
“And there’s no question that crypto ATMs are a high-risk product,” Burke said.
The Interior Minister is expected to present the new legislation to Parliament in the coming months.
The announcement can be seen as the latest escalation in Australia’s ongoing fight against digital currency ATMs, which began with the AUSTRAC crackdown last December.
Eliminate ATMs
Australia is among the world’s largest markets for digital currency ATMs. According to at Coin ATM Radar, there is 2,012 digital currency ATMs nationwide, with only Canada and the United States having more: 3,700 and 31,233, respectively.
This represents a substantial increase from the 23 digital currency ATMs the country had in 2019 and the 60 in 2022. Since then, the numbers have exploded, with ATMs available in shopping malls, petrol stations and other convenient locations – Sydney now has 430 alone.
This exponential growth has focused industry attention on AUSTRAC, which in December last year launched a crackdown on digital currency ATM providers in Australia that were not complying with its Anti-Money Laundering and Anti-Terrorism Financing (AML/CFT) regime.
“Intelligence from AUSTRAC shows that cryptocurrency poses an increased risk of money laundering and is increasingly being exploited for money laundering, scams and money mule activities.” said the agency.
Under Australian law, digital currency ATM operators must monitor all transactions, report suspicious activity, carry out Know Your Customer (KYC) checks on all users and submit reports to AUSTRAC for cash transactions worth more than AUD 10,000 (USD 6,300). They must also have robust practices in place to identify and minimize the risk that their machines are used to facilitate money movements associated with scams, fraud or other illicit proceeds.
To ensure these minimum standards are met, an “AUSTRAC Internal Cryptocurrency Working Group” has been established to investigate and supervise the sector.
Months after its creation, amid increasing usage nationwide, the task force revealed that many ATM operators were failing to meet their regulatory obligations. This has led AUSTRAC to formally warn digital currency ATM operators about their lack of AML/CFT controls.
“We want to ensure that crypto ATM providers have robust practices in place to minimize the risk that their machines can be used to launder dirty money or to scam and defraud innocent people.” said Brendan Thomas, CEO of AUSTRAC, when announcing the notice in March.
The agency backed up its comments with more action in June, this time announcing it was imposing a AUD5,000 ($3,250) limit on cash deposits and withdrawals at crypto ATMs, along with warning signs of scams, stricter monitoring of transactions, and enhanced customer due diligence obligations.
“In light of the risks and harms we consider, it is absolutely necessary to ensure that the industry meets minimum standards and reduces the misuse of crypto ATMs,” Thomas said in a June 3 statement. press release.
He added that the new terms were “designed to help protect individuals from scams by deterring criminals from directing them to a crypto ATM, as well as protect businesses from criminal exploitation.”
However, AUSTRAC’s CEO said the new rules were not set in stone and indicated the agency would “keep the effectiveness of these conditions under review and adjust them as necessary”.
It now appears that the Australian government intends to support AUSTRAC’s efforts by granting the agency additional powers to continue the fight against the booming digital currency ATM sector, which has continued its steady growth in the country despite the crackdown and crime it allegedly facilitates.
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