Australia’s financial intelligence agency, AUSTRAC, announced on June 3, 2025, a set of new regulations targeting cryptocurrency ATMs (known as CATMs) throughout Australia. Under the new rules, each cash transaction at a CATM will be limited to a maximum of A$5,000. CATM operators must also implement enhanced customer due diligence procedures, prominently display warnings about potential scams, and introduce more rigorous transaction monitoring systems. The measures are designed to address a recent surge in fraud and scam activity involving cryptocurrency ATMs.

According to AUSTRAC, Australia currently hosts nearly 1,820 cryptocurrency ATMs, making it the third-largest market for CATMs in the world. These machines are typically located in convenience stores, petrol stations, supermarkets, and shopping centers, offering users the ability to convert cash into various cryptocurrencies, most commonly Bitcoin. Over the past two years, the number of installed CATMs in Australia has grown rapidly from just a few dozen units in 2019 to the current total.

Between mid-2024 and early 2025, law enforcement agencies recorded losses exceeding A$3.1 million in scams that involved cryptocurrency ATM transactions. Scammers typically persuade victims—often through unsolicited phone calls or online messages—to attend a nearby CATM and deposit cash in exchange for cryptocurrency, which is then transferred to the scammer’s digital wallet. Once the cash has been converted into cryptocurrency and sent, recovery of the funds is highly unlikely due to the pseudonymous nature of most digital currency networks.

Victims of these scams have tended to be in the older age brackets. Police data indicate that individuals aged 60 to 70 accounted for a significant proportion of the total transaction value at CATMs during the nine months leading up to April 2025. In particular, customers over 50 collectively represented over two-thirds of the total transaction volume by value, even though they make up a smaller share of the overall cryptocurrency user base. Authorities have noted that scammers often target older Australians by posing as government officials, financial institution representatives, or technical support agents, urging them to transfer funds via a CATM.

Under the new AUSTRAC conditions, CATM operators must enforce a strict A$5,000 cap on each cash deposit or withdrawal transaction. Any attempt to deposit or withdraw more than A$5,000 in a single transaction will be automatically declined by the ATM. This measure is intended to reduce the potential for large, scam-driven transfers and to limit the use of CATMs for money laundering purposes.

In addition to the transaction limit, operators are required to implement enhanced customer due diligence (CDD) protocols. These protocols mandate that CATM operators verify the identity of customers making transactions near the A$5,000 threshold or when other risk factors are detected. Verification may involve requesting and checking government-issued identification, cross-referencing customer details against sanctions and watch lists, and recording transaction data in real time. Operators must also retain transaction records for a minimum period as specified under anti-money laundering and counter-terrorism financing (AML/CTF) regulations.

All CATM locations must display clear warning notices advising users of common cryptocurrency scams. These notices must include guidance on verifying the legitimacy of any individual or organization requesting a cryptocurrency transfer, and they must encourage users to seek independent verification before proceeding with a transaction. The warning notices are required to be prominently placed on or near the ATM interface and in any user instructions visible to customers.

Furthermore, operators must deploy more robust transaction monitoring systems capable of detecting suspicious patterns. Examples of such patterns include repeated transactions just below the A$5,000 limit, rapid successive transactions from the same account or device, and transactions associated with wallets or addresses known to be linked to confirmed scam activity. When a transaction is flagged as suspicious, operators are required to file a report with AUSTRAC and, where appropriate, notify local law enforcement agencies.

AUSTRAC has also indicated that any CATM operator seeking to register a new machine or renew an existing registration must demonstrate full compliance with the new rules. In one confirmed instance, AUSTRAC refused to renew the registration of a CATM operator on the grounds that the operator failed to implement adequate AML/CTF measures. Operators found to be in breach of the new conditions may face penalties ranging from monetary fines to suspension or cancellation of their registration, effectively barring them from operating CATMs in Australia.

The Australian Federal Police (AFP) have provided statistics that underscore the scale of the problem. AFP records show that from July 2024 to April 2025, more than 600 scam-related incidents involved CATMs, resulting in total reported losses of A$3.1 million. The majority of these incidents remain under active investigation. The AFP has emphasized that once funds are converted to cryptocurrency and transmitted through a CATM, the trail becomes difficult to follow, complicating recovery efforts and prosecutions.

In response to rising scam trends, AFP officers have noted that scammers are increasingly using sophisticated scripts and claiming to represent reputable organizations. Victims are often told that they owe money to the tax office, have a warrant for their arrest, or need to pay a fake security deposit to resolve a fictitious technical problem. In many cases, victims travel to multiple CATM locations, sometimes across different suburbs, before depositing cash. The AFP advises that any request for payment via cryptocurrency should be treated with immediate suspicion, particularly if the request follows an unsolicited call or message.

Operators of cryptocurrency ATMs have expressed concern about the immediate impact of the A$5,000 transaction limit. Some operators have noted that legitimate users—such as small business owners wanting to convert larger amounts of cash or cryptocurrency investors making bulk transfers—may find the limit restrictive. In the absence of a secondary mechanism to split larger transactions into multiple legitimate transfers, users will need to visit multiple machines or return on consecutive days, potentially inconveniencing those not engaged in illicit activity.

Nonetheless, several operators have started rolling out software updates to implement the transaction limits and associated customer verification processes. Those updates include modules that freeze transactions identified as high-risk and automatically issue on-screen prompts that direct users to call customer support if they believe they have been unfairly flagged. Operators have also begun printing and affixing the required scam warning notices on all existing machines ahead of the compliance deadline.

In the global context, Australia’s CATM count of approximately 1,820 machines places it behind the United States and Canada but well ahead of most other countries. As of early 2025, the United States hosted over 31,000 crypto ATMs, while Canada had around 3,000. Europe and Asia show more modest numbers, with the majority of CATMs concentrated in urban centers in Germany, the United Kingdom, and Singapore. Authorities in several jurisdictions have pointed to Australia’s rapid adoption of CATMs as a model that, without proper safeguards, can open pathways for illicit finance.

The rollout of AUSTRAC’s new CATM regulations coincides with a broader effort by Australian regulators to strengthen oversight of the digital asset sector. Over the past year, AUSTRAC has issued guidelines for cryptocurrency exchanges to enhance AML/CTF controls, including regular risk assessments, staff training, and the appointment of compliance officers. The new CATM rules represent the latest phase in an evolving regulatory framework aimed at ensuring that digital currency services operate within established financial integrity standards.

In parallel with regulatory changes, both AUSTRAC and the AFP have launched a public awareness initiative targeted at older Australians. The campaign includes informational materials circulated through senior centers, community groups, and online channels frequented by retirees. The materials explain how cryptocurrency scams typically operate, outline steps to verify legitimate financial requests, and provide contact details for reporting suspected fraud. Officials involved in the campaign stress that education is a critical component of the overall strategy to reduce scam-related losses.

AUSTRAC has indicated that it will conduct periodic reviews to assess the effectiveness of the A$5,000 transaction limit and related measures. If data from ongoing investigations and transaction reports suggest that the new rules are insufficient to curb illicit activity, AUSTRAC may consider further restrictions, such as a lower transaction cap or expanded requirements for customer verification. At the same time, regulators have acknowledged the importance of maintaining consumer access to digital assets, particularly for individuals who rely on CATMs as their primary means of entering the cryptocurrency market.

Industry stakeholders expect that compliance costs will rise as operators invest in monitoring software, staff training, and signage required under the new regulations. Some CATM manufacturers have already begun developing software updates that include built-in AML/CTF features, such as real-time risk scoring and automated reporting interfaces. These enhancements are anticipated to spread to the broader market over the next several months.

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Filed under: Bitcoin - @ June 3, 2025 3:25 am