Crackdown on Crypto ATMs: AUSTRAC Targets Money Laundering and Scams in Australia’s Digital Cash Frontier

Australian financial crime authorities are tightening the screws on cryptocurrency ATMs as part of a sweeping campaign to address rising risks of money laundering, scams, and fraud that are increasingly ensnaring vulnerable citizens. The Australian Transaction Reports and Analysis Centre (AUSTRAC) is leading the charge, unveiling a raft of new oversight measures for crypto ATM operators, including transaction limits and stricter compliance obligations. This regulatory escalation places cryptocurrency vending machines squarely in the spotlight as a new and growing nexus for illicit financial activity in the country.

The move comes as crypto ATMs proliferate across Australia, echoing global trends in digital asset adoption. Marketed as easy access points to cryptocurrencies, these machines have become attractive tools for criminal misuse. AUSTRAC’s investigation into nine major crypto ATM operators uncovered significant increases in suspicious transactions and escalating evidence of scam-related activity, revealing a disturbing pattern of abuse within the sector.

Perhaps most concerning is the demographic skew in user data. AUSTRAC found that individuals aged 50 and over accounted for more than 70% of the total transaction value processed via crypto ATMs, with the 60–70 age bracket alone responsible for nearly 30%. These figures suggest that older Australians—especially retirees—are being disproportionately targeted by fraudsters. Common scams include romance hoaxes, bogus investment opportunities, and impersonation schemes where victims are pressured into converting cash into crypto at ATMs. Once the funds are sent, recovery is near impossible.

Brendan Thomas, CEO of AUSTRAC, said, “The taskforce has uncovered disturbing trends which have confirmed that cryptocurrency ATMs are being used for scam and fraud-related transactions.” His remarks align with broader law enforcement concerns over how emerging financial technologies are being manipulated by criminals deploying age-old fraud tactics in modern formats.

Under Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), crypto ATM operators are classified as digital currency exchange (DCE) providers and must register with AUSTRAC. They are obligated to carry out customer due diligence (CDD), maintain robust transaction monitoring frameworks, and report any suspicious matters. In a clear signal of increased regulatory muscle, AUSTRAC has refused to renew the registration of at least one operator—Harro’s Empires—due to persistent concerns about criminal exploitation through its machines.

To clamp down on further abuse, AUSTRAC has introduced several mandatory measures for all remaining registered crypto ATM providers. These include a $5,000 limit on cash deposits and withdrawals per transaction to disrupt the flow of large sums that could be laundered or used for scam payments. Operators are also required to implement stricter CDD practices, especially when customers approach lower transaction thresholds. Identity verification must now be applied more rigorously to detect and deter potentially suspicious activity.

In a bid to shield the public from deception, AUSTRAC has mandated that visible scam warnings be displayed at all crypto ATM locations and on machine interfaces. These alerts are designed to educate users on common fraud techniques and highlight the irreversible nature of cryptocurrency transfers. Meanwhile, operators must bolster their transaction monitoring capabilities to catch red flags such as smurfing (structured deposits), mule account behavior, and unusually rapid activity by individual users.

The regulator’s aim is not just compliance for its own sake but to render crypto ATMs less attractive to bad actors who seek to exploit these machines as loopholes in the traditional financial system. The overrepresentation of older Australians in transaction volumes points to a critical vulnerability. Scams frequently involve imposters posing as law enforcement, bank officials, or overseas relatives convincing victims they need to settle fabricated debts or protect their funds. Victims are then instructed to deposit cash into a crypto ATM, effectively vanishing their money into untraceable crypto wallets.

In collaboration with the Australian Federal Police-led Joint Policing Cybercrime Coordination Centre (JPC3), AUSTRAC has also helped roll out educational materials near ATM sites, encouraging users to look out for warning signs and take steps to verify the legitimacy of any financial requests before making a transaction.

Crypto ATMs pose unique challenges from an anti-money laundering standpoint. Despite mandatory KYC procedures, the cash nature of these transactions and their physical interface allow users to potentially obscure their identities or the source of funds through third-party transactions or structured deposits. Unlike traditional financial services, there are rarely account relationships involved, making it more difficult to build and monitor a customer’s risk profile. Furthermore, criminals often orchestrate “smurfing” operations—depositing smaller sums across multiple locations using various individuals to avoid triggering reporting thresholds.

AUSTRAC reports that over 99% of crypto ATM transactions involve cash being used to buy digital assets such as Bitcoin, Ethereum, and Tether. In 2024 alone, more than 150,000 such transactions were logged across Australia’s network of over 1,800 crypto ATMs, with a total value estimated at AUD 275 million.

While the new restrictions directly target ATM operators, AUSTRAC has warned that digital currency exchanges more broadly must assess their own risk exposure. Exchanges that handle cash-based crypto transactions are urged to voluntarily adopt similar transaction limits, bolster customer vetting procedures, and upgrade monitoring systems in alignment with the latest AUSTRAC guidance. Regulatory non-compliance can carry steep consequences, including deregistration, fines, and criminal prosecution. AUSTRAC's recent public enforcement against Harro’s Empires marks a "line in the sand" for the industry.

Leading industry body Blockchain Australia has welcomed the heightened scrutiny, viewing enhanced compliance standards as essential for the sector’s credibility and long-term viability. According to AUSTRAC, many reputable providers are now embracing rigorous governance and consumer protection as cornerstones of future growth.

Yet, emerging risks remain. Criminal networks are developing more advanced laundering strategies involving privacy coins, crypto mixers, and cross-border transfers, often using ATMs as an initial layer of obfuscation. Victim funds are commonly funneled offshore before authorities can intervene. Innovations such as real-time blockchain analytics, biometric verification, and ATM geofencing offer new tools for risk management, but require sustained investment and regulatory cooperation.

Recent legislative updates—including provisions from the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2020 Measures)) Act 2020—have strengthened AUSTRAC’s enforcement capabilities. However, experts warn that effective countermeasures demand coordinated action across regulators, law enforcement, and industry to protect vulnerable citizens and keep pace with criminal ingenuity.

AUSTRAC has vowed to maintain vigilant oversight of the sector, promising to reassess and adapt regulatory conditions as needed. “We will keep the effectiveness of these conditions under review, and adjust if needed. AUSTRAC will continue to monitor this space and we will take more action if needed, where and when we see harm occurring,” Brendan Thomas stated.

For consumers, the warning is stark: while crypto ATMs may offer convenience, they also carry serious risks. Once money is converted and sent through these machines, it is nearly impossible to retrieve. With scams on the rise and targeting older Australians in particular, AUSTRAC’s message is clear—caution and awareness are essential in this evolving digital landscape.

Through tighter rules, increased transparency, and a commitment to public education, AUSTRAC is reshaping how Australia regulates crypto ATMs—ensuring that innovation in financial services does not come at the cost of community safety or regulatory integrity.

By fLEXI tEAM