New Zealand Shuts 220 Crypto ATMs by 2025 as Part of Anti-Money Laundering Overhaul

New Zealand has enacted a nationwide ban on cryptocurrency ATMs effective July 2025, a move announced by Associate Justice Minister Nicole McKee as part of its Anti-Money Laundering (AML) reform agenda. The prohibition targets the conversion of fiat currency to digital assets via unregulated kiosks, a practice regulators argue facilitates illicit activities such as drug trafficking and financial fraud. Over 220 crypto ATMs are set to be decommissioned, directly impacting transactions involving major cryptocurrencies like Bitcoin and Ethereum [1]. The government emphasized that the policy aims to disrupt criminal networks while minimizing burdens on legitimate businesses, a stance reiterated in statements from McKee: “We will make it more difficult for criminals to convert cash into high-risk assets… This Government is serious about targeting criminals” [2].

The decision aligns with global efforts to tighten crypto oversight. Jurisdictions including the U.S., Australia, and EU members have imposed stricter compliance requirements on crypto infrastructure to curb misuse. A 2023 report by the Financial Action Task Force (FATF) underscored the persistent risks of unregulated crypto channels being exploited for illicit finance, reinforcing the rationale for New Zealand’s action [1]. However, analysts note the ban’s localized impact may be limited due to New Zealand’s relatively small role in global crypto markets. While the policy is expected to hinder criminal conversions, immediate data shows no significant shifts in market liquidity or decentralized finance (DeFi) activity [2].

The ban raises questions about its effectiveness in curbing illicit transactions. Critics argue that blocking physical ATMs may not address deeper issues, as dark web platforms and offshore services could continue facilitating anonymous crypto transactions. Moreover, the restriction does not extend to online exchanges, which remain subject to varying degrees of regulation. Experts suggest that a comprehensive approach—such as enhanced transaction monitoring and international collaboration—would be more impactful in addressing root causes of crypto-related crime [1].

New Zealand’s move reflects broader regulatory trends. The country has updated its AML laws to include virtual asset service providers, requiring them to adhere to standards comparable to traditional banks. The crypto ATM ban is a further step in this strategy, signaling regulators’ intent to treat digital assets with the same scrutiny as fiat currencies. Yet, the success of the policy will depend on enforcement efficacy and the adaptability of criminal networks to circumvent existing measures [2].

The policy’s implications for the local market remain uncertain. While the government frames the ban as a necessary safeguard against crime, critics highlight its potential to deter retail adoption of cryptocurrencies. Crypto ATMs have served as accessible entry points for unbanked populations and individuals skeptical of traditional financial systems. Regulators, however, maintain that the risks posed by illicit activity outweigh these benefits, particularly in a context where drug-related crime and fraud persist as significant challenges [1].

Sources:

[1] [Crypto ATMs were just banned in New Zealand] (https://www.reddit.com/r/CryptoCurrency/comments/1m80qgz/crypto_atms_were_just_banned_in_new_zealand/)

[2] [Crypto Town Hall (@Crypto_TownHall) / X] (https://x.com/crypto_townhall?lang=en)