Australia Eyes New Crackdown on Crypto ATMs Amid Rising Scam Fears

Australia is moving to tighten its grip on the crypto industry, with new legislation that could give the country's financial watchdog, AUSTRAC, sweeping powers to ban or restrict cryptocurrency ATMs deemed to pose high risks.

The move comes as authorities raise alarm over the growing use of crypto ATMs in money laundering and scam operations across the country. According to Home Affairs Minister Tony Burke, the government's proposal to amend the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act will empower AUSTRAC to classify certain financial services or products, including crypto ATMs, as high risk and to restrict or prohibit them when necessary.

Crypto ATMs, which allow users to buy or sell digital currencies using cash, have multiplied rapidly in Australia in recent years. Data from the Australian Federal Police shows the number of machines jumped from around 20 in 2019 to more than 1,800 in 2025, making the country one of the largest markets for crypto ATMs in the Asia-Pacific region.

However, regulators say the boom has come with growing abuse. AUSTRAC reports that nearly all transactions through these machines involve cash deposits converted into cryptocurrency, a channel that has become attractive for criminals seeking to conceal illicit funds. In several cases, victims of scams have been instructed by fraudsters to deposit cash into crypto ATMs, effectively losing their money within minutes.

“Criminal syndicates are exploiting these machines to move money quickly and anonymously,” Burke said in a recent briefing. “We need to make sure that the tools we have can keep up with how fast technology is changing.”

To stem the problem, AUSTRAC has already introduced interim measures that include an AU$5,000 cap on cash deposits, mandatory Know-Your-Customer (KYC) checks, and clear scam-warning messages displayed at ATMs. The agency has also revoked the registration of non-compliant operators, including one major firm accused of ignoring transaction monitoring rules.

The proposed reforms would go further, giving AUSTRAC the ability to ban individual operators or entire product categories if they are found to facilitate financial crime. Authorities could also extend oversight to crypto exchanges that handle cash transactions, ensuring stricter reporting and anti-money laundering controls.

While regulators say the changes are aimed at protecting consumers and preventing crime, not everyone agrees. Industry groups warn that blanket restrictions could harm legitimate businesses and discourage innovation in Australia's growing digital asset sector. Some argue that instead of bans, the government should focus on improving education and tightening compliance frameworks.

Consumer advocates, however, have welcomed the move. With scam losses linked to crypto ATMs exceeding AU$3 million last year, many see the proposed reforms as overdue. Older Australians, in particular, have been identified as common victims of such schemes.

The draft legislation is expected to be released for public consultation in the coming weeks, with feedback from industry players, law enforcement, and financial experts shaping the final version.

If passed, the law would mark one of Australia's strongest regulatory actions against physical crypto access points, signaling a new phase in the country's bid to curb digital-asset crime.