Australia has witnessed a remarkable surge in the number of cryptocurrency ATMs (ATMs), with the country becoming the world’s third-largest market for these machines. However, this rapid growth has also raised concerns about their potential use for illicit activities, such as money laundering.
The number of crypto ATMs in Australia has increased by a staggering 17 times in just two years, from 67 machines in August 2022 to over 1,160 today. This growth trajectory places Australia behind only the United States and Canada in terms of the total number of crypto ATMs.
Despite the rapid expansion, the use of crypto ATMs in Australia has not gone unnoticed by law enforcement agencies. TRM Labs, a blockchain intelligence firm, has identified crypto ATMs as a potential vulnerability for money laundering due to their reliance on cash and lack of stringent account requirements.
The Australian Federal Police has established a multi-agency task force to address the issue of money laundering involving crypto ATMs. The task force has found evidence of criminals using these machines to launder illicit gains.
TRM Labs’ analysis reveals that the cash-to-crypto industry, dominated by crypto ATMs, has processed at least $160 million worth of illicit transactions since 2019. In 2023, scams and fraud accounted for the majority of these illicit activities, with over $30 million being laundered through crypto ATMs.
While some crypto ATM operators have implemented anti-scam measures, such as displaying warnings and checklists, the risk of misuse remains. Regulators around the world are taking steps to address these concerns and mitigate the potential for illicit activities.
Germany’s financial watchdog recently seized 13 crypto ATMs in 35 locations, demonstrating the global crackdown on unregulated machines. In the United Kingdom, the Financial Conduct Authority pulled 26 unlicensed crypto ATMs, significantly reducing the number of active machines in the country.
The rapid growth of crypto ATMs in Australia has brought both opportunities and challenges. While these machines provide convenient access to cryptocurrencies, they also pose risks related to money laundering and other illicit activities.
As the cryptocurrency industry continues to evolve, it is essential for regulators and industry players to work together to address these concerns and ensure the responsible and secure use of crypto ATMs. By implementing robust anti-money laundering measures and promoting transparency, the industry can mitigate risks and foster a more secure environment for users.
