Australian regulators have put crypto ATM providers on notice amid concerns over increased scams and money laundering. The action marks a precautionary measure after discovering trends and indicators of suspicious activities linked to crypto ATMs.
Australia’s financial crime watchdog, AUSTRAC (The Australian Transaction Reports and Analysis Centre), has placed crypto ATM providers on notice, claiming some of these firms may be violating anti-money laundering and counter terrorism laws, helping criminals launder money.
AUSTRAC CEO Brenden Thomas has revealed that the crypto task force formed last December to investigate crypto ATMs has identified proof of suspicious behaviour, including transactions linked to scams and fraud. The task force, which includes members from regulatory, enforcement, and intelligence departments, focused on crypto ATMS at the beginning, but expanded its capacity to handle compliance issues across financial markets.
The increased scrutiny was a reflection of the increased number of crypto ATMs in the country. In 2019, the number of crypto ATMs in Australia was 23, which has now turned to 1648, the highest in the Asia-Pacific region.
The Increased Crypto ATM Scams Create Concerns
Unlike the traditional financial system, Crypto ATMs offer anonymity and ease of access, making them prone to hacks and money laundering activities. Since no KYC verification is required for transactions, the platform has been exploited for transferring illicit funds. Crypto ATM transactions are difficult to track, thus, they are used widely for illegal transactions. The lack of stringent rules, similar to those of traditional ATM, even increases the number of scams.
AUSTRAC To Minimise The Risk Of Money Laundering And Scams Associated With Crypto
AUSTRAC’s ‘On Notice’ on crypto ATMs came as a result of the increased scams and fraud revolving around crypto, in which crypto ATMs play a major role. By ensuring crypto ATM providers adhere to standards to minimize the risks, so that their kiosks can’t be used to loot money or scam innocent people. Kiosks are crypto ATMs, physical machines through which users buy or sell cryptocurrencies using cash or cards.
Under the Anti-Money Laundering and Counter Terrorism Financing Act, the crypto ATM providers must register with AUSTRAC, perform KYC verification, and evaluate transactions. If any suspicious activity is detected, it must be reported to the authority in charge. Also, the providers have to inform the authority of transactions that exceed $10,000.
The AUSTRAC CEO has revealed their plans to collaborate with crypto ATM providers to bring their operations into compliance with the existing financial regulations. The team-up will raise the industry standards, and also, the operators who don’t adhere to the standards will have to face enforcement actions.
US Lawmakers Tighten Regulations On Crypto ATMs
With the increased scams around crypto ATMs, US lawmakers are tightening regulations on these platforms. In March, The Crypto ATM Prevention Act was introduced by Illinois Senator Dick Durbin, which brought limitations for daily crypto transactions at the crypto ATMs. The act also requires ATM providers to provide a mandatory refund for scam victims who report the action within 30 days.
On the other hand, the Controllable Electronic Fraud Prevention Act mandates ATM operators to deliver fraud warnings and refund rights for victims who report the fraud within 90 days.