The hidden ATMs helping criminals launder millions: Why Australia is about to ban these machines

Those gleaming machines tucked into suburban shopping centres and city corners might look like regular ATMs, but they're actually fuelling a massive criminal enterprise. AUSTRAC estimates 85 per cent of the transactions sent by the top users of crypto ATMs are the proceeds of scams or money mule activity.

Home Affairs Minister Tony Burke has had enough. In a speech that's sending shockwaves through Australia's cryptocurrency scene, he's announced sweeping powers to crack down on these increasingly popular machines—and in some cases, ban them entirely.

The numbers are staggering. It is estimated that 99 per cent of crypto ATM transactions are cash deposits, which are high risk for money laundering. That means almost every transaction at these machines involves someone feeding in cash—precisely the kind of activity that makes authorities nervous.

What Exactly Are These Crypto ATMs?

If you've never heard of a crypto ATM, you're not alone. Bitcoin ATMs, or BTMs, are physical kiosks that facilitate transactions of Bitcoin in exchange for traditional currency or debit. Unlike the ATM at your local bank, these machines work completely differently.

BTMs connect to a Bitcoin wallet instead of a bank account, and transactions are processed on the blockchain. Essentially, users of such ATMs can feed in cash to receive crypto in digital wallets or obtain physical notes from token sales.

Think of it as a vending machine for digital money. You put in real cash, and out comes cryptocurrency that exists only on your phone or computer. The process is surprisingly simple, which is part of what makes these machines so attractive to both legitimate users and criminals.

Australia's Explosive Growth Problem

Here's where the story gets truly alarming. Australia has experienced explosive growth in crypto ATMs, and we're not talking about a gradual increase. Australia is in third spot with nearly 1,200, up from just 73 two years ago, and more are on the way.

To put this in perspective, three years ago there were 200 in operation, up from 23 six years ago. The growth has been so rapid that Australia has the highest number of CATMs in the region, and the third highest in the world.

This isn't just happening in Sydney and Melbourne. These machines have spread across the country, from regional shopping centres to busy city corners. The original article mentioned that according to Coin ATM Radar, there are over 500 in Sydney alone, with about 300 each in Melbourne and Brisbane.

How Criminals Are Gaming the System

The criminal exploitation of these machines is sophisticated and concerning. In a statement last year, police outlined the laundering technique: illicit cash is put into an ATM in return for digital assets, which are then spun through many transactions until their origins are nearly impossible to trace.

But there's another layer to this criminal enterprise that particularly affects vulnerable communities. The original article revealed that international students and other visa holders are being targeted to sell, rent, or hand over bank account details, creating what authorities call 'mule accounts.'

These accounts become the vehicles for moving dirty money. Criminals approach students—often struggling financially—and offer them money to use their legitimate bank accounts for transferring funds. The students might not even realise they're participating in money laundering schemes.

The Government's Unprecedented Response

Burke's announcement represents one of the most significant crackdowns on financial crime technology in recent Australian history. Amendments to the Anti-Money Laundering/Counter Terror Financing Act will give the Australian Transaction Reports and Analysis Centre (AUSTRAC) the power to restrict or prohibit certain 'high-risk financial products, services and delivery channels, including crypto ATMs.'

This isn't just about tighter regulation—it's about giving authorities the power to ban these machines entirely if they pose too great a risk. The government is also updating systems to make it easier for banks to identify suspicious account activity linked to visa holders.

As Burke explained in his National Press Club speech, quoted in the original article: 'There are significant money laundering, terrorism financing and serious crime risks associated with crypto ATMs.'

What This Means for Legitimate Crypto Users

Not everyone using crypto ATMs is a criminal, of course. Many Australians have legitimate reasons for buying cryptocurrency, from investment to sending money overseas. These users are now caught in the crossfire of the government's crackdown.

The industry argues that crypto ATMs serve an important purpose. As one operator noted in the research, these machines 'boost financial inclusion by offering easy access to crypto.' For some people, particularly those without traditional bank accounts or those who prefer cash transactions, crypto ATMs provide a vital service.

However, the overwhelming criminal use of these machines means legitimate users may soon find their options severely limited. The government's new powers could result in many machines being shut down or subjected to much stricter identification and transaction limits.

The International Context

Australia isn't alone in grappling with crypto ATM crime, but our response is among the most dramatic globally. The rapid growth in these machines has caught regulators around the world off guard.

Internationally, authorities have identified similar patterns of criminal abuse. The technology that makes these machines convenient for users—the ability to conduct large cash transactions with minimal identification—is precisely what makes them attractive to money launderers.

Protecting Yourself from Crypto Scams

For seniors, the rise of crypto ATMs and the associated criminal activity represents yet another avenue for sophisticated scams. While you might never use a crypto ATM yourself, understanding how these scams work can help protect you and your family.

Be particularly wary of:

• Anyone asking you to withdraw cash and put it into a crypto ATM
• Scammers claiming you need to buy cryptocurrency to 'verify' your identity or 'secure' your bank account
• Offers from strangers to use your bank account for 'temporary' transactions
• Investment schemes that require you to buy cryptocurrency through ATMs

Remember, legitimate businesses and government agencies will never ask you to buy cryptocurrency or use crypto ATMs as part of resolving problems with your accounts or avoiding legal trouble.

The Road Ahead

The government's timeline for implementing these changes hasn't been fully announced, but the urgency in Burke's language suggests action will come quickly. AUSTRAC will need to develop the regulatory framework for identifying and potentially banning high-risk crypto ATMs.

For the industry, this represents a major challenge. Legitimate operators will need to demonstrate they can effectively prevent criminal use of their machines, likely through enhanced identification requirements and transaction monitoring.

The changes will also affect the broader cryptocurrency industry in Australia, as regulators take a more hands-on approach to digital asset businesses. As Burke noted in the original article: 'Our legislation for a new framework for digital asset business will extend existing financial services laws in a targeted way.'

Looking Forward: A Safer Financial Future

While the crackdown might inconvenience some legitimate cryptocurrency users, the scale of criminal abuse revealed by AUSTRAC's analysis makes government action inevitable. The statistics speak for themselves—when 99 per cent of transactions are cash deposits and 85 per cent of heavy users are linked to criminal activity, these machines have clearly strayed far from their intended purpose.

For most Australians, particularly seniors who are often targeted by sophisticated financial scams, this crackdown represents an important step toward a safer financial landscape. The government's willingness to take strong action against emerging criminal technologies sends a clear message that Australia won't tolerate digital innovation being hijacked by criminals.

The crypto ATM saga also highlights the importance of staying informed about new technologies and the risks they might present. As our financial world becomes increasingly digital, understanding these developments—even if we don't use them ourselves—helps us protect our families and communities.

What are your thoughts on this crackdown? Have you noticed these crypto ATMs in your local area, or do you have concerns about cryptocurrency-related scams? We'd love to hear your experiences and questions in the comments below.