Over the past two years, Australia has experienced a significant surge in the number of cryptocurrency ATMs, increasing seventeenfold and marking it as one of the fastest-growing markets globally for these kiosks. Despite this rapid expansion and Australia becoming the third-largest market for crypto ATMs, concerns about their use for illicit activities persist.
Australia now boasts 1,162 cryptocurrency ATMs, a substantial rise from just 67 in August 2022. This growth includes the addition of 160 machines since the end of April 2024, shortly after the country surpassed the 1,000-ATM milestone.
Despite its rapid growth, Australia holds just a 3% share of the global market. This figure pales in comparison to the United States, which dominates with over 82% of the global share through its 31,877 ATMs. Canada follows as a distant second with 3,004 machines, representing 7.8% of the market share.
The expansion of crypto ATMs in Australia has likely attracted attention from law enforcement agencies. Blockchain intelligence firm TRM Labs highlights that these kiosks have been identified as potential vulnerabilities for money laundering activities. In response, the Australian Federal Police initiated a multi-agency money laundering task force in March 2023, noting that criminals have exploited crypto ATMs to launder illicit funds.
Illicit Transactions and Regulatory Concerns
Globally, regulators are wary of the potential for crypto ATMs to facilitate scams and other criminal activities due to their cash-based operations and lack of account requirements for transactions. TRM Labs’ analysis indicates that the cash-to-crypto industry, primarily dominated by crypto ATMs, has processed at least $160 million in illicit transactions since 2019. In 2023 alone, illicit volumes in this sector were double the average for the overall cryptocurrency ecosystem.
In 2023, scams and fraud represented nearly 80% of all illicit volumes, with over $30 million directed to wallets known to be linked to fraudulent activities. To combat this, some kiosks have implemented anti-scam warnings and checklists to deter misuse.
International Crackdowns
Various countries are taking action against the unregulated spread of crypto ATMs. Germany recently seized 13 kiosks from 35 locations, while the United Kingdom’s Financial Conduct Authority shut down 26 unlicensed machines last year, reducing the country’s active machines by 90%.
As the crypto ATM market in Australia continues to expand, the balance between fostering innovation and ensuring regulatory compliance remains a critical challenge. The ongoing developments in regulatory frameworks and enforcement actions highlight the complexities of integrating cryptocurrency into the broader financial system while safeguarding against its misuse.
Featured image credit: Freepik
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