TLDR
New Zealand bans crypto ATMs to combat money laundering and illicit activity.
Legislation limits international cash transfers to $5,000 to curb financial crime.
157 crypto ATMs in New Zealand identified as key money laundering tools.
New legislation enhances regulators’ power to track suspicious financial activity.
New Zealand has taken a strong stance against money laundering and organized crime by announcing a ban on cryptocurrency ATMs.
The decision is part of the government’s broader efforts to update its anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks. The move aims to disrupt criminal networks that have been exploiting these machines to launder illicit funds.
Government Moves to Strengthen Anti-Money Laundering Framework
The New Zealand government has set in motion a series of legislative measures aimed at curbing financial crime. Associate Justice Minister Nicole McKee announced that the country would outlaw crypto ATMs, which have been increasingly used by criminals to convert illicit cash into digital assets.
In a statement, McKee emphasized that the country needed a more agile system to prevent criminals from using digital currencies for illegal activities.
In addition to banning crypto ATMs, New Zealand will also introduce a cap on international cash transfers. The new legislation will limit such transfers to $5,000. This move is designed to prevent the flow of illicit funds overseas. McKee added that while tightening regulations, the government is focused on ensuring that legitimate businesses are not burdened by excessive compliance costs.
Crypto ATMs and Their Role in Financial Crime
The government’s decision to ban crypto ATMs comes after law enforcement in New Zealand identified these machines as a significant avenue for criminal activity. According to the police, criminals, particularly drug dealers, have been using crypto ATMs to convert cash into cryptocurrency.
In total, New Zealand has approximately 157 crypto ATMs, a number that the authorities believe has contributed to the rise in money laundering cases.
The Financial Intelligence Unit (FIU) will gain additional powers to track suspicious financial activity and gather more information from financial institutions. This will strengthen the enforcement of AML/CFT measures, allowing regulators to act faster when criminal activity is detected.
Proposed Legislation to Enhance Enforcement Powers
Alongside the ban on crypto ATMs, New Zealand’s government is also planning to introduce new legislation that will enhance the powers of regulators and law enforcement agencies. The bill will as a result give the Financial Intelligence Unit more authority to request information from banks and other financial entities, enabling them to track suspicious transactions more effectively.
McKee stated that the new legislation would focus on improving the AML/CFT system while maintaining balance.
“We want to ensure that we are targeting criminals effectively without putting undue pressure on businesses that comply with the law,” she said. The government is also reviewing proposals to reduce the compliance burden on businesses deemed to be low-risk, aiming to make the regulatory environment more manageable for them.
Global Trend Toward Crypto ATM Regulation
New Zealand’s decision to ban crypto ATMs is part of a growing global trend. In other countries like Australia and the United States, regulators have also started to scrutinize the role of crypto ATMs in financial crimes.
Australia’s financial intelligence agency, AUSTRAC, recently imposed stricter rules on crypto ATM operators, including limits on cash deposits and enhanced customer checks. Similarly, Spokane, Washington, has completely banned crypto ATMs, citing their use in scams targeting vulnerable residents.
As New Zealand moves forward with its crypto ATM ban, it is clear that many countries are taking a closer look at how these machines are used in financial crime. By tightening regulations, authorities aim to create a safer and more secure financial environment that minimizes the risk of illegal activities linked to digital currencies.
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