Australia Tightens Regulations on Crypto ATMs Amid Rising Scam Concerns

Australia is stepping up its regulatory measures regarding cryptocurrency ATMs in response to an alarming increase in scams. The Australian Transaction Reports and Analysis Centre (AUSTRAC) has announced new operating rules aimed at providing a safer environment for users engaging with crypto kiosks across the nation. These changes are crucial as federal police report a significant rise in fraud related to these machines.

New Transaction Limits and Rules

As part of its new regulations, AUSTRAC is implementing a cash deposit and withdrawal limit of AUD 5,000 (approximately USD 3,250) for crypto ATMs. This limit is designed to mitigate potential risks associated with these transactions, particularly those concerning money laundering and fraud. In a press release dated June 3, AUSTRAC emphasized the importance of these new rules for protecting users, stating that they aim to deter criminals from exploiting these kiosks.

While the initial focus is solely on crypto ATM providers, AUSTRAC is encouraging crypto exchanges operating in Australia to consider adopting similar limits if they permit cash transactions. This proactive approach showcases the agency’s commitment to creating a safer trading environment for all.

Monitoring and Due Diligence

CEO Brendan Thomas of AUSTRAC stressed that these new conditions are not set in stone; they will undergo continuous review to assess their effectiveness in curbing suspicious activities. The agency aims to collaborate closely with law enforcement and ATM providers to ensure compliance and adaptive measures.

“The conditions are designed to help protect individuals from scams by deterring criminals from directing them to a crypto ATM,” Thomas remarked. He further underscored the need to establish minimum standards that will reduce the criminal misuse of these platforms.

Demographic Concerns

An AUSTRAC task force, formed in September, shed light on a worrying trend: a significant majority, about 72%, of transactions by value are conducted by users over 50 years of age. This demographic is particularly vulnerable to scams, especially those targeting older Australians who may be less familiar with cryptocurrency and its associated risks.

The task force was established to examine whether crypto ATMs meet established anti-money laundering and counter-terrorism checks. Its findings indicate a pressing need for increased consumer protection as older individuals are becoming prime targets for fraud through these machines.

Rising Scam Incidents

The Australian Federal Police (AFP) reported on June 3 that between January 2024 and January 2025, there were 150 unique reports of scams involving crypto ATMs. The total losses from these scams exceeded AUD 3.1 million (over USD 2 million) and were described as potentially just the “tip of the iceberg.” These figures highlight the urgent need for enhanced regulatory measures in the emerging cryptocurrency landscape.

AFP Commander Graeme Marshall noted that many individuals who fall victim to such scams often remain unaware of their victimization. They might not know how to report the fraud or may feel embarrassed to do so. Marshall encourages victims to share their experiences with friends and family to raise awareness and prevent others from becoming victims.

The Growing Landscape of Crypto ATMs

Despite the challenges posed by scams, the adoption of crypto ATMs in Australia has surged. The country has transformed into the third-largest hub for crypto ATMs globally, trailing only the United States and Canada. From a mere 67 machines in August 2022, Australia now boasts 1,819 crypto ATMs, with nearly 150,000 transactions occurring annually.

Leading providers like Localcoin, Coinflip, and Bitcoin Depot dominate the market, offering 753, 700, and 182 ATMs, respectively. The significant growth in crypto ATMs underscores a shift in consumer behavior, particularly as private firms have begun to invest heavily in the sector.

Conclusion: A Continuous Challenge

The regulatory changes prompted by AUSTRAC and the AFP represent a commitment to enhance consumer protection and mitigate risks surrounding crypto ATMs. These initiatives will likely evolve as the landscape of cryptocurrency continues to change, necessitating ongoing collaboration between regulatory bodies, law enforcement, and the private sector.