New Zealand Bans Crypto ATMs, Caps Cash Transfers to Combat Financial Crime

New Zealand has implemented a series of stringent measures to combat financial crime, including a nationwide ban on cryptocurrency ATMs and a $5,000 cap on international cash transfers. These reforms are part of a broader overhaul of the country’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime, announced by Associate Justice Minister Nicole McKee. The changes are a response to the evolving financial landscape and the increasing misuse of digital finance tools by criminal groups.

Law enforcement officials in New Zealand have identified crypto ATMs as a significant channel for laundering drug money. With 157 machines in operation nationwide, these ATMs facilitate untraceable transactions, raising concerns among authorities. The new $5,000 limit on outbound transfers aims to close another loophole exploited by illicit actors to move money offshore. Additionally, a bill is being prepared to expand the enforcement powers of police and regulatory agencies, including enhanced authority for the Financial Intelligence Unit to collect data critical to crime prevention.

The government also plans to establish a new supervisory body dedicated to overseeing financial sanctions and ensuring AML compliance is adequately funded. While tightening oversight, officials insist the reforms are designed to avoid penalizing compliant businesses. Two amendments currently under review seek to streamline requirements for lower-risk entities and reduce burdensome checks for everyday customers.

New Zealand’s move follows similar efforts in other regions. In Australia, AUSTRAC recently introduced stricter rules for crypto ATM operators, including tighter cash limits and monitoring. Last month, the regulator refused to renew the registration of a local crypto ATM operator, Harro’s Empires, placing operating conditions, including transaction limits, on them. In the US, Spokane, Washington, has banned crypto ATMs entirely, citing their use in scams targeting vulnerable residents. Lawmakers in the US Senate are also attempting to tighten laws on a state and local level, with one attempt led by Illinois Senator Dick Durbin. He has introduced the Crypto ATM Fraud Prevention Act, which would bring in legislative measures designed to protect the public while attempting to limit inconvenience for law-abiding users. New users would be prevented from spending more than $2,000 a day at one of these machines, rising to $10,000 in a 14-day period. Operators would also need to have a detailed conversation whenever a new user is trying to complete a transaction with a value of over $500. Crucially though, they would also be entitled to refunds if a police report is filed within 30 days.