New Zealand Bans Crypto ATMs, Caps International Transfers at $5,000 to Combat Money Laundering

New Zealand has implemented a comprehensive ban on cryptocurrency ATMs and set a $5,000 cap on international cash transfers as part of its enhanced efforts to combat money laundering and financial crime. This move is a significant step in the country's ongoing efforts to strengthen its anti-money laundering (AML) and counter-terrorist financing (CFT) regime. The ban on crypto ATMs is aimed at preventing the laundering of illicit funds and terrorist financing, as these machines have been identified as primary portals for money laundering activities, particularly by drug dealers.

The government's decision comes after a significant shift in the global financial and regulatory landscape since 2019. Associate Justice Minister Nicole McKee emphasized the need for a more agile and targeted AML/CFT system that can effectively curb criminals' ability to launder money. The ban on crypto ATMs is part of a broader package of reforms that includes setting a $5,000 cap on international transfers to limit the illicit movement of funds offshore. This cap is designed to make it more difficult for criminals to transfer large sums of money out of the country.

In addition to these measures, the New Zealand government and Cabinet plan to introduce a bill that will significantly enhance the enforcement powers of police and regulators. This bill will enable authorities to combat money laundering more effectively by empowering the Financial Intelligence Unit to gather crucial information for combating crime. It will also establish a new financial sanctions supervisory regime to support AML/CFT efforts. The government is also working to remove unnecessary compliance requirements for lower-risk customers and entities, with two proposed amendments currently under review.

The ban on crypto ATMs and the cap on international transfers are part of a broader effort to target criminals while minimizing the burden on legitimate businesses. McKee stated that the government is committed to targeting criminals rather than tying up legitimate businesses in unnecessary red tape. This approach aims to create a more efficient and effective AML/CFT system that can adapt to the evolving threats posed by financial crime.

The New Zealand government's actions reflect a growing global trend of tightening regulations around cryptocurrencies and digital assets. As the use of cryptocurrencies continues to rise, governments around the world are increasingly concerned about their potential use in illicit activities. By banning crypto ATMs and setting limits on international transfers, New Zealand is taking proactive steps to address these concerns and protect its financial system from abuse. The government's focus on targeting criminals while minimizing the impact on legitimate businesses is a balanced approach that aims to enhance the country's AML/CFT regime without stifling innovation and economic growth.