The government of New Zealand has decided to revamp its anti money laundering (AML) and counter terror financing (CTF) regulations this year. As part of the legislative overhaul, the government there restricted international money transfers at $5,000 and has also decided to impose a ban on crypto ATMs, a government statement said on Wednesday, July 9.
Crypto ATMs are physical machines that let individuals purchase or sell crypto assets via debit cards and cash. Essentially, these kiosks let individuals facilitate crypto-to-cash transactions and vice versa.
Nicole McKee, the Associate Justice Minister of New Zealand noted in the official post that financial criminals have been exploiting these machines to fly under the radar, dodging law enforcement agencies.
“We will make it more difficult for criminals to convert cash to high-risk assets such as crypto currencies by banning crypto ATMs,” McKee noted.
For now, the exact timeline of this ban to go into effect in New Zealand remains unclear. McKee’s blog only said that, “targeted consultation with industry and stakeholders will begin shortly to inform the new national strategy and levy framework.”
Given the anonymity of cryptocurrency transactions, notorious financial criminals frequently use crypto assets to move illicitly obtained funds or to finance illegal activities.
In September last year, a report by blockchain intelligence firm had TRM Labs claimed that the rate of illicit financial activities involving crypto ATMs is more than that of the wider crypto ecosystem. The report had noted that crypto ATMs globally processed around $160 million in illicit transactions between 2019 and 2024.
In order to clamp down on the exploitation of crypto ATMs, other countries are also deploying active measures.
In June this year, for instance, Australia enforced a deposit and withdrawal limit of AUD 5,000 (roughly $3,271) on transactions processed via crypto ATMs. In 2023, the UK law enforcement agencies had also conducted crackdowns on crypto ATMs citing lack of regulatory compliance.
As per Statista, the US presently hosts the largest number of active crypto ATMs in the world. Canada, Australia, and Spain are other regions where these cash-to-crypto kiosks are active in significant numbers.