According to a recent Bloomberg report, Australia is experiencing a significant increase in cryptocurrency automatic teller machines (ATMs), making it one of the fastest-growing markets for these terminals globally.
The number of crypto ATMs in the country has increased from 73 to nearly 1,200 in two years. Due to this growth, the demand for these services and their potential hazards have been debated.
Crypto ATMs enable users to deposit cash to obtain digital assets in their wallets or to withdraw physical currency from the sale of tokens.
Although the United States remains the largest market, with an estimated 32,000 machines, and Canada follows with approximately 3,000, Australia has rapidly risen to third position.
North American operators are driving expansion in Australia. What is the current state of affairs?
Operators assert that these ATMs facilitate financial inclusion by offering effortless access to digital currencies, a perspective that is corroborated by the substantial increase in the number of devices.
Nevertheless, the expansion has been met with controversy. According to critics, the risk of money trafficking and fraud is exacerbated by the proliferation of crypto ATMs.
According to Angela Ang, a senior policy counsel at blockchain intelligence firm TRM Labs, Australian authorities have identified crypto ATMs as a money laundering vulnerability.
Since 2019, the cash-to-crypto industry has processed a minimum of $160 million in illicit transactions worldwide, according to TRM Labs. In the interim, Chainalysis Inc. predicts that illicit digital asset activity in Australia alone totaled approximately $223 million from 2022 to 2023.
As a recent report indicates, scammers are increasingly employing crypto ATMs and terminals in their schemes. They instruct victims to deposit cash into these devices, which convert the money into digital currency and facilitate rapid, untraceable transfers, frequently to overseas accounts.
In a recent incident, a victim was deceived into depositing nearly $5,000 into a Bitcoin ATM, and the fraudsters demanded gift cards to settle a fabricated debt. The frequency of such incidents is increasing, particularly among seniors, with more than 2,000 complaints submitted in 2023.
In response to concerns regarding scams, numerous prominent Australian institutions have implemented restrictions on transactions with digital asset exchanges.
It is important to note that the expansion of North American providers’ overseas presence has been a significant factor in the growth of the crypto ATM market in Australia.
Bitcoin Depot Inc., a U.S.-based corporation, is deploying over 200 additional kiosks throughout Australia, and they are currently awaiting regulatory approval.
Local factors have also influenced the proliferation of crypto ATMs in Australia. This penchant for wagering has extended to the cryptocurrency market, where speculation regarding digital currencies has garnered substantial attention.
The Future of Crypto ATMs in Australia and Around the World
The Australian regulators have been preoccupied with the rapid proliferation of crypto ATMs as they attempt to balance the necessity for innovation in digital finance with their apprehensions regarding illicit activity.
To operate legally in Australia, all digital currency exchange providers must register with the Australian Transaction Reports and Analysis Centre (AUSTRAC).
In response to apprehensions regarding the potential for ATMs to be used for money laundering, the Australian Taxation Office has prioritized the prevention of technology-enabled financial crime.
A recent report also indicated that the United Kingdom initiated its first prosecution concerning crypto ATM operations. Habibur Rahman was charged with laundering £300,000 ($395,000) and operating unregistered crypto ATMs.
This case resulted from a police raid in 2023 at an electronics store, where numerous ATMs were confiscated. Crypto ATMs were prohibited by the Financial Conduct Authority (FCA) in 2022, eliminating their presence in the country.
Rahman’s case is a component of a more extensive global initiative to regulate the cash-to-crypto industry, which has conducted at least $160 million in illicit transactions since 2019.
