New Zealand Bans Crypto ATMs to Curb Money Laundering and Drug Trafficking

Generated by AI AgentCoin World
Wednesday, Jul 23, 2025 11:05 am ET1min read
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Aime RobotAime Summary

- New Zealand banned crypto ATMs nationwide in 2025 to combat money laundering and drug trafficking, citing 220 unsecured kiosks as conduits for illicit finance.

- The move, part of broader AML reforms including cash transfer caps and enhanced data sharing, faces criticism from providers like CoinFlip, who argue for targeted regulations over outright bans.

- Joining the UK and Singapore in strict crypto ATM controls, New Zealand aims to balance digital innovation with security, reflecting global trends toward proactive financial crime prevention.

New Zealand has taken a decisive step in its anti-money laundering (AML) efforts by banning cryptocurrency ATMs nationwide, a move announced on July 17, 2025, by Associate Justice Minister Nicole McKee. The ban targets kiosks that allow cash-to-crypto conversions, which regulators argue have become conduits for illicit financial activity. By April 2025, over 220 such machines were operational, predominantly in convenience stores, petrol stations, and laundromats, often with minimal user verification [1]. The government cited cases like a $64 million laundering scheme and cross-border drug trafficking as justification for the prohibition [1].

The decision aligns with a broader overhaul of New Zealand’s AML/CFT framework. Alongside the ATM ban, the reforms include a NZ$5,000 cap on international cash transfers and expanded data-sharing powers for the Financial Intelligence Unit. These measures aim to disrupt criminal networks by limiting their ability to move funds offshore and enabling real-time monitoring of suspicious transactions [1]. McKee emphasized the need for a “smarter, more agile” system that balances enforcement with support for legitimate businesses [1].

Industry reaction has been mixed. CoinFlip, New Zealand’s largest crypto ATM provider, criticized the ban as a setback for digital innovation, advocating instead for targeted regulations such as wallet pinning and pre-transaction risk checks. The company argued that criminal misuse could be addressed without eliminating the technology entirely, highlighting a tension between security and technological progress [1].

While

Bitcoin
remains legal in New Zealand—classified as property and subject to income tax—the regulatory environment is tightening. Users can freely buy, sell, and hold cryptocurrencies, but businesses must adhere to AML regulations. The government’s approach underscores its commitment to integrating digital assets into existing frameworks while curbing their misuse [1].

Globally, New Zealand joins countries like the UK and Singapore in imposing strict controls on crypto ATMs. Unlike Australia, which opted for regulatory caps and enhanced compliance rules, New Zealand’s ban represents a more definitive stance. The UK’s 2022 prohibition, Singapore’s 2022 moratorium, and China’s 2017 crypto ban reflect similar concerns over financial crime and market integrity [1].

The reforms signal a shift toward proactive AML strategies, prioritizing risk mitigation while maintaining a space for innovation. As the global regulatory landscape evolves, New Zealand’s approach offers a case study in balancing security with technological advancement.

Source: [1] [title1:Crypto ATMs were just banned in New Zealand: Here’s why it matters] [url1:https://cointelegraph.com/explained/crypto-atms-were-just-banned-in-new-zealand-heres-why-it-matters]