AUSTRAC’s Crackdown on Crypto ATMs: Compliance, Fraud, and Future Implications
The Australian Transaction Reports and Analysis Centre warned that crypto ATM providers who are not following the anti-money laundering rules will face legal action.
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AUSTRAC’s crypto task force alerted the public to crypto ATM scams. On March 31, the agency mentioned in a press release that it has been working closely with businesses since last December to implement AML and CTF measures. But many ATM providers ignored the rules in Australia that concerned the safety of crypto transactions.
AUSTRAC Chief Executive Brendan Thomas sent a strong message to crypto ATM operators, making it clear that while the agency is willing to assist businesses in meeting compliance requirements, those who fail to follow the rules will face serious consequences. “We will keep working with industry and raising standards, but we will also act against non-compliant operators,” Thomas stated.
Crypto ATMs on the Rise in Australia
Australia is presently leading the Asia-Pacific region in the use of cryptocurrency ATMs. There were only 23 machines in Australia in 2019, which went up to 60 in 2022. So far, the figure has gone up to approximately 1,648, of which 348 are located in Sydney alone. Such a steep rise indicates the increasing use of digital money but, in doing so, raises regulatory and security concerns.
Crypto ATMs make it easy for individuals to buy Bitcoin, often using cash deposits. While this provides a convenient way to access cryptocurrency, it raises red flags regarding money laundering and fraud. AUSTRAC has identified cases where Australians have lost their life savings due to scams involving these ATMs, reinforcing the need for stronger regulatory oversight.
Compliance Rules for Crypto ATM Operators
To legally operate in Australia, crypto ATM providers must be registered with AUSTRAC and comply with AML/CTF regulations. These include:
- Monitoring transactions and reporting suspicious activity
- Verifying customer identities to prevent fraud
- Submitting reports on significant transactions
Organizations failing to meet these requirements have to pay penalties, and legal action will be taken. AUSTRAC has reaffirmed its commitment to strengthening enforcement activity and compliance by operators with sanctioned regulations.
Crypto ATM Market Faces Global Regulatory Challenges
Australia’s action against rogue operators comes at a good time when the global crypto ATM industry is experiencing reversals on the back of regulatory headwinds. Coin ATM Radar has reported that over 1,000 Bitcoin ATMs went offline worldwide in February. Since late 2022, the number of machines worldwide has dropped by 2,062, representing a slowdown in market growth.
Despite these problems, the United States is still the world leader in crypto ATMs, holding over 78% of all functional machines. Canada has 9.2%, and Australia and Europe combined hold just under 4% of the world’s market. These figures indicate that trends are shifting as governments around the world become more and more restrictive in their regulation.
What Lies Ahead for Crypto ATMs in Australia?
As AUSTRAC tightens up enforcement, the future of crypto ATMs in Australia is in operators’ compliance with tighter standards. Although such legislation keeps criminal financial activity at bay, it also prompts companies to become safer and more transparent.
For legitimate players, rule compliance will mean avoiding costly fines and lawsuits. For buyers, compliance can mean safer transactions and fewer chances of fraud. As Australia develops its cryptocurrency regulatory environment, the recipe for having a secure and sustainable crypto market will be balancing regulation and innovation.
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