To ATM or not to ATM? Australia weighs the future of crypto ATMs

At the centre of the current storm is the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2026 (the Bill), which proposes a new power enabling the Minister to restrict or prohibit high-risk ways of providing designated services, including the exchange of money for virtual assets via a crypto ATM. The Bill has cleared the House of Representatives and is now before the Senate.

The Parliamentary Joint Committee on Intelligence and Security report has added further rain to the crypto ATM parade. The Committee pointed to striking evidence from AUSTRAC’s crypto ATM taskforce, including its examination of 90 of the 100 most prolific crypto ATM users, and its finding that an estimated 85% of transactions were proceeds of scams and/or money mule activities. Pending passage, the Committee is already urging consideration of restrictions or an outright prohibition. It concluded that crypto ATMs “contribute significant harm to scam victims and those coerced into moving the proceeds of crime.”

Crypto ATMs: a quick refresher

As the name suggests, cryptocurrency ATMs are physical kiosks that enable users to exchange cash for virtual assets (and vice versa). These ATMs have attracted increasing regulatory attention because they have been readily used to launder illicit funds.

Perhaps most tellingly, crypto ATMs are the only worked example of a high-risk mechanism identified in the Bill’s explanatory materials, placing them firmly in the regulatory spotlight.

Industry is pushing back, warning against such a broad, indeterminate scope. Major crypto ATM operators Localcoin and CoinFlip have argued for regulation that distinguishes between compliant and non-compliant operators.

A new power to tackle high-risk mechanisms

At the heart of the reforms is proposed section 77A, which would empower the Minister to restrict or prohibit the use of a high-risk mechanism to provide a designated service.

The power would not operate as an automatic ban. Rather, the Minister would need to be satisfied of factors including, that using the high‑risk mechanism to provide the designated service has caused, will cause or is likely to cause, significant harm to either or both the financial system and the Australian community; and second, that the restriction or prohibition is necessary in the public interest.

Risk of abuse of power

When first proposed, concerns were raised that AUSTRAC may use the new powers to target emerging technologies and delivery channels broadly. While the banning power is now specifically directed to conduct by reporting entities, concerns remain that the power could be used to target a “product, service, delivery channel or thing” on vague public interest grounds that could extend beyond AML/CTF compliance. While the Parliamentary Committee has made recommendations intended to curb how the new powers are exercised, including by putting them in the hands of a minister rather than the AUSTRAC CEO, the proposed powers remain very broad. The risk is that the new powers could be used to target products or services that a specific minister or regulator simply does not like, subject only to administrative law oversight.

AUSTRAC in action

While Parliament considers whether regulators need stronger tools, AUSTRAC is already deploying its existing regulatory arsenal.

On 10 August 2026, AUSTRAC announced the suspension of Cryptolink Pty Ltd’s Virtual Asset Service Provider registration for three months, preventing its 96 crypto ATMs from operating.[1] The suspension followed earlier regulatory action against Cryptolink Pty Ltd. In October 2025, AUSTRAC accepted an enforceable undertaking from the operator following alleged contraventions involving late threshold transaction reporting and weaknesses in its AML/CTF risk assessments.

Despite satisfying the conditions of that undertaking, Cryptolink Pty Ltd failed to submit required reports or respond to a request for information. AUSTRAC ultimately determined that the business presented too great a risk to continue operating.

The episode offers a timely glimpse of what is already possible at the operator level.

The Bill raises a much bigger question: what happens when the concern is not simply the operator, but the mechanism itself?

The changes to AML/CTF obligations implemented earlier this year should strengthen customer due diligence, transaction monitoring and reporting. Given the regulator’s existing powers, the question arises as to whether the new powers are strictly necessary given the potential unintended consequences.

Looking forward

The Committee’s findings paint a somewhat bleak picture for the crypto ATM industry. With scam victims, money mules and suspected illicit funds featuring prominently in the evidence, the groundwork for stronger intervention is increasingly being laid.

The pertinent question remains whether the Government adopts a watch-and-wait approach, or if an impending scandal will be the catalyst for a blanket prohibition.

Whichever way the Bill lands, the crypto ATM story should be read as part of a broader trend: Australia’s regulatory perimeter is changing, and AUSTRAC is committed to targeting high risk conduct using new and existing powers. It is a timely reminder for everyone operating in this space to review their compliance processes, and in doing so protect both their businesses and their customers.

[1] https://www.austrac.gov.au/news-and-media/media-release/austrac-orders-cryptolinks-crypto-atms-offline