New Zealand Bans Crypto ATMs, Limits Cash Transfers to $5,000 to Combat Money Laundering

New Zealand has taken a decisive step in its fight against money laundering and organized financial crime by implementing a ban on cryptocurrency ATMs and imposing a $5,000 limit on international cash transfers. This move is part of a broader overhaul of the country's Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime, aimed at disrupting the avenues used by criminals to move illicit funds.

Associate Justice Minister Nicole McKee announced the measures, highlighting the government's commitment to targeting criminals while avoiding unnecessary red tape for legitimate businesses. The ban on crypto ATMs is designed to make it more difficult for criminals to convert cash into high-risk assets like cryptocurrencies, which can then be sent abroad to fund illegal activities such as drug imports or fraud-related transactions.

The Financial Intelligence Unit (FIU) will also be granted new powers to demand ongoing information from banks and other reporting entities regarding individuals flagged for suspicious activity. This enhanced surveillance will enable authorities to better monitor and control the movement of funds, thereby strengthening the country's AML framework.

Two AML reform bills are currently in parliament and are expected to pass before the end of the year. These bills aim to remove some of the most burdensome compliance requirements, providing practical relief for businesses while maintaining high standards of financial integrity. The government has emphasized that easing compliance for law-abiding businesses does not mean lowering standards; rather, it is about applying them intelligently.

According to a report by New Zealand’s Ministerial Advisory Group on Transnational, Serious and Organised Crime, criminals have increasingly relied on crypto ATMs to quickly convert cash into crypto and send it abroad for illicit purposes. The ban on these machines is expected to disrupt the financial networks that support criminal enterprises, making it more difficult for criminals to use cryptocurrencies for money laundering and other financial crimes.

New Zealand's crackdown on crypto ATMs is part of a global trend of increased scrutiny around these machines. Other regions have also implemented measures to regulate or ban crypto ATMs in response to rising concerns about their use in fraudulent activities. For instance, Australia’s financial intelligence agency introduced new rules for crypto ATM operators, including a cap on cash deposits and withdrawals, stricter monitoring, and enhanced customer checks. Similarly, Spokane, Washington, has announced a complete ban on crypto ATMs, citing their use by fraudsters to target vulnerable residents.

The ban on crypto ATMs and the cap on international cash transfers are expected to have a significant impact on the cryptocurrency landscape in New Zealand. These measures will make it more difficult for criminals to use cryptocurrencies for illicit activities, thereby reducing the risk of money laundering and other financial crimes. The government's proactive stance on AML reflects its commitment to maintaining the integrity of the financial system and protecting the interests of its citizens.