Minister Tony Burke announced that an absolute prohibition on crypto ATMs will not be sought by the government, but it desires that AUSTRAC be granted the legal authority to enforce one under the provisions of new draft legislation is the outcome that is desired by the government.
Authority to constrain or prohibit cryptocurrency ATMs would be conferred upon Australia’s national financial intelligence bureau under proposed new statutory measures that are being developed by the country’s Minister for Cybersecurity and Home Affairs, Tony Burke is the action that is being taken.
It was announced by Burke during a speech at the National Press Club on Thursday that the proposed legislation will grant the Australian Transaction Reports and Analysis Centre (AUSTRAC) the capacity to limit or ban “high-risk products,” a category in which crypto ATMs are included.
While conventional ATMs operated by banks are also utilized for fraudulent and illicit purposes, Burke stated that in the instance of crypto ATMs, law enforcement is experiencing limited efficacy in monitoring and recovering unlawful assets, and there is concern that they present a risk for the laundering of money is the problem that was identified.
“I’m not pretending for a minute that everybody who goes in and uses a crypto ATM is a problem, but proportionately what’s happening is a significant problem in an area which is much harder for us to trace.”
While Australia was initially a sluggish market for cryptocurrency ATMs, their deployment underwent exponential growth towards the close of 2022 after private entities commenced major investment in the sector, resulting in the nation now being recognized as the third-largest center for crypto ATMs, with 2,008 machines, up from 67 in August 2022 is the outcome that is observed.
Crypto ATM Operator Says Existing Regulations Are Sufficient
Over half of the crypto ATMs in Australia are operated by three providers collectively: Localcoin, with 868 devices in its inventory; Coinflip, which possesses 682 ATMs; and Bitcoin Depot, with 267 units under management is the arrangement that is observed.
A spokesperson for Coinflip asserted that cryptocurrency ATMs are already governed by stringent regulations and Know Your Customer (KYC) verification, which mandates the submission of valid government-issued identification before any transaction is permitted to be executed is the claim that was made by the spokesperson.
Several enforcement actions against cryptocurrency ATMs have previously been initiated by AUSTRAC, and in June, a new set of operational guidelines and transaction ceilings was issued by the agency is the fact that is noted by the report.
Machines Are Equipped With Additional Safety Measures
It was also stated by Coinflip that the machines are equipped with cameras, pre-transaction monitoring through blockchain analysis, and real-time scam alerts to assist in restraining malicious participants is the claim that was made by Coinflip.
“Crypto ATMs are an important bridge between the physical and digital world, taking cryptocurrency out of the cloud and into the physical world using a familiar experience,”
the spokesperson said.
“As traditional ATMs continue to decline across Australia, interest in cryptocurrency surges, and banks maintain a restrictive posture toward digital assets, the environment is primed for CATMs to thrive.”
New Powers Can Be Adopted Voluntarily
Burke stated that an outright prohibition on the machines will not be pursued by the government, nor will a specific course of action be recommended to AUSTRAC due to the possibility that it might instigate a “legal challenge” is the reason that was given by Burke.
Nevertheless, his intention is to bestow upon the agency “the authority to be capable of restricting or banning those devices”, thereby ensuring that the bureau is furnished with the necessary instruments to regulate emerging technology in a manner that is determined by its own discretion is the objective that he has in mind.
“I’m not sure what the next thing is going to be, and there will be times when AUSTRAC may decide on something that doesn’t quite fit that definition, but is similar to do they want to ban or do they want to regulate?”
Burke said.
“How do they want to deal with this? Are there ways of actually avoiding the problem? That’s why they’ll be able to have this power with respect to high-risk products,”
he added.
