New Zealand Bans Bitcoin ATMs to Curb Money Laundering

The New Zealand government is implementing comprehensive anti-money laundering (AML) legislation that is set to significantly impact the cryptocurrency industry. The proposed laws aim to outlaw all Bitcoin crypto ATMs across the country and impose a limit of NZ$5,000 (approximately US$3,000) on overseas cash transfers. This move underscores the government's determination to curb anonymous cryptocurrency transactions and enhance financial transparency.

With only 18 crypto ATMs currently operational in the country, the government's stance is clear: the era of unregulated and anonymous cryptocurrency access is coming to an end. Justice Minister Nicole McKee emphasized the necessity of this crackdown, stating that these machines have been exploited by criminals for illegal activities. "These are obvious loopholes that criminals have been exploiting," she said during a press conference. "We’re making New Zealand a hostile place for money laundering."

Crypto ATMs, while providing easy access to digital assets, have raised significant concerns among law enforcement. According to a New Zealand Police investigation, the majority of the 18 machines currently in operation are linked to illegal activities such as drug cash funnelling. Instead of imposing stricter regulations or a licensing system, the government has proposed a complete ban on these devices. The objective is to eliminate anonymous points of crypto entry that cannot be properly traced using existing AML methods.

An officer from New Zealand’s Financial Intelligence Unit (FIU), who requested anonymity due to the ongoing nature of the investigations, highlighted the lack of monitoring with these kiosks. "There’s just no monitoring with these kiosks. They’re cash-heavy and simple to abuse," the officer stated.

In addition to the ban on crypto ATMs, the proposed measures include a NZ$5,000 limit on individual foreign cash transfers. This restriction aims to prevent large-scale cashouts via unmonitored transfers, which are often used to launder illegal cryptocurrency or convert it into fiat overseas. The New Zealand Treasury estimates that these adjustments will increase compliance costs by NZ$40 million but save NZ$180 million in long-term financial crime-related damages.

Not everyone is in favor of these measures. BlockchainNZ, a local advocacy group for the crypto industry, issued a formal statement opposing the outright ban on crypto ATMs. Executive Director Alison Park argued that criminalizing infrastructure used by legitimate users is shortsighted. "We support reasonable regulation, but criminalizing infrastructure used by legitimate users is shortsighted," she said. "Licensing would be a more balanced solution." Industry players argue that such measures could push activity offshore, reducing transparency and making illicit tracking even harder. In response, lawmakers have indicated that the policy will undergo a full 18-month review period once implemented.

The measures extend beyond device prohibitions and monetary limitations. The legislation also empowers the Financial Markets Authority (FMA) and the Financial Intelligence Unit by enabling them to require real-time data from exchanges and wallets suspected of assisting illicit activities. These AML modifications are part of a global trend, with nations such as the United Kingdom, Singapore, and the European Union also increasing cryptocurrency monitoring, although few have advocated steps as direct and comprehensive as New Zealand's proposed ban.

By banning crypto ATMs, New Zealand's proposed reforms could serve as a test case for how far governments are willing to go to root out crypto-related financial crime. By targeting physical access points and tightening fiat gateways, the country is betting on a highly visible and enforceable framework. Whether this approach will stifle innovation or enhance accountability remains to be seen.