Crypto ATM Ban Proposed in New Zealand Financial Crime Crackdown

New Zealand wants to outlaw cryptocurrency ATMs and place limits on overseas cash transfers.

Nicole McKee, the country’s associate justice minister, announced these plans Wednesday (July 9) as the government works on overhauling its anti-money laundering (AML) and countering terrorism financing (CFT) program.

“This government is serious about targeting criminals, not tying up legitimate businesses in unnecessary red tape,” McKee said in a news release.

“Cabinet has agreed to introduce a bill to strengthen enforcement powers for police and regulators to crack down on those involved in money laundering.”

This bill, she added, will create a new financial sanctions supervisory regime and “initiate engagement on a sustainable levy” to pay for AML/CFT system improvements. In addition, the legislation would limit the amount of cash that can be transferred internationally ($5,000 per transfer), lessening the ability of criminals to move money offshore.

“We will also make it more difficult for criminals to convert cash to high-risk assets such as crypto currencies by banning crypto ATMs,” McKee said.

As the name suggests, crypto ATMs let users purchase crypto by inserting cash or a card and having the digital tokens sent to their wallet.

However, many countries have imposed regulations or warnings over the machines due to their popularity with criminals.

Last year, the U.S. Federal Trade Commission (FTC) said bitcoin ATMs had become a “payment portal for scammers” as they’ve grown in popularity.

The amount of money consumers lost in scams involving these machines jumped almost tenfold between 2020 and 2023, from $12 million to $114 million, the commission said. But as most frauds are not reported, the $114 million figure likely reflects a fraction of the total losses, the FTC added.

“The lies told by scammers vary, but they all create some urgent justification for consumers to take cash out of their bank accounts and put it into a bitcoin ATM,” the FTC said in the release. “As soon as consumers scan a QR code provided by scammers at the machine, their cash is deposited straight into the scammer’s crypto account.”

Soon after the FTC issued this warning, the British government announced its first-ever prosecution for operating unlicensed crypto ATMs.

“Our message today is clear. If you’re illegally operating a crypto ATM, we will stop you,” Therese Chambers, joint executive director of enforcement and market oversight at the U.K. Financial Conduct Authority, said at the time. “If you’re using a crypto ATM, you are handing your money directly to criminals. Criminals can exploit crypto ATMs to launder money globally.”

More recently, the FBI noted a 66% uptick in crypto fraud between 2023 and 2024, an increase driven in part by bitcoin ATM scams.

The post Crypto ATM Ban Proposed in New Zealand Financial Crime Crackdown appeared first on PYMNTS.com.