New Zealand Bans Crypto ATMs, Caps International Cash Transfers at $5,000

New Zealand has implemented significant changes to its anti-money laundering (AML) and countering financing of terrorism (CFT) regime, including a ban on crypto ATMs and a cap on international cash transfers. These reforms are part of a broader effort to curb illicit financial activities and enhance the country's financial surveillance capabilities.

The new measures, unveiled by Associate Justice Minister Nicole McKee, include the introduction of a bill that will expand enforcement powers for police and regulators. This bill will also enable the Financial Intelligence Unit to gather more comprehensive financial data on individuals of interest and initiate consultation on a levy to fund the regime. McKee emphasized the government's commitment to making New Zealand a difficult place for criminals to operate while ensuring that legitimate businesses face minimal red tape.

One of the key reforms is the establishment of an upper limit of $5,000 per transfer for international cash transfers. This move is designed to restrict the ability of criminal organizations to move funds offshore while allowing legitimate transfers through electronic bank channels. An April report by the Ministerial Advisory Group on Transnational, Serious and Organised Crime highlighted that criminals often use crypto ATMs to purchase and transfer crypto to offshore criminals, funding activities such as drug imports and scams.

Industry leaders have generally welcomed the crackdown, viewing it as a necessary step to legitimize the sector. Janine Grainger, co-founder of New Zealand-based crypto trading platform Easy Crypto, applauded the ban, noting that while the sector has seen rapid growth, it is crucial to support this growth in a way that ensures customer safety and compliance. Grainger also pointed out that the changes primarily affect high-risk scenarios rather than everyday users, who now prefer safer and more transparent platforms.

Arjun Vijay, founder of crypto exchange Goittus, echoed similar sentiments, stating that without sufficient safeguards like Know Your Customer (KYC) procedures, it was inevitable that Bitcoin ATMs would face bans in many jurisdictions. He noted that these ATMs impose high conversion fees, making them less appealing to cost-conscious users and mainly attracting those seeking privacy or to convert illicit crypto or cash.

The crackdown on crypto ATMs in New Zealand follows growing international concern over their role in fraud and money laundering. This move aligns with similar actions taken by other regions, such as Australia and the U.S., where authorities have flagged worrying trends in scams targeting vulnerable populations and significant fraud losses tied to these machines.