New Zealand has rolled out new regulations banning all cryptocurrency ATMs nationwide and capping international cash transfers, aiming to close a gray loophole exploited by criminals using digital assets to move illicit funds.
In response to the growing threat of financial crime, the New Zealand government has launched a major reform of its anti-money laundering (AML) regime, which includes a complete ban on all 221 crypto ATMs and a NZD 5,000 cap on individual international cash transfers. Authorities say the move is a key step in curbing cross-border money laundering, drug trafficking, and scam-related fund flows.
Associate Justice Minister Nicole McKee stated in a press release that the reform’s goal is “to eliminate safe havens for bad actors while reducing unnecessary compliance burdens for legitimate businesses.” The proposed legislation will broaden the enforcement powers of police and financial regulators and grant the Financial Intelligence Unit (FIU) enhanced access to monitor high-risk individuals.
“We want to build a financial environment where legitimate business flows freely, but illicit money can’t move an inch.”-Nicole McKee, Associate Justice Minister
According to a government-cited report, New Zealand’s 221 crypto ATMs have long served as a “breeding ground for criminal activity.” Offenders frequently use them to rapidly convert cash into Bitcoin and transfer the funds offshore within minutes, often for drug deals, scams, or laundering operations.
Why Target Crypto ATMs?
Compared to regulated online exchanges, crypto ATMs are notorious for their high anonymity, weak identity checks, and hefty fees, making them prime tools for illicit finance. Coin ATM Radar data shows New Zealand’s machines are concentrated in urban centers and commercial districts.
Janine Grainger, co-founder of New Zealand-based crypto platform Easy Crypto, noted, “While crypto ATMs have contributed to broader accessibility, the associated risks have grown in parallel.” She added that mainstream users now overwhelmingly prefer regulated, transparent digital exchanges, whereas ATMs with fees as high as 20% primarily appeal to high-risk actors.
Regulation ≠ Repression
Although the nationwide ban appears tough, many voices within the crypto industry have expressed support or understanding.
Arjun Vijay, founder of crypto exchange Giottus, told Decrypt that crypto ATMs were “inevitably going to face regulatory bans” in jurisdictions lacking strong KYC (Know Your Customer) safeguards. He pointed out that their typical 5–10% conversion fees make them unappealing to price-sensitive users, and their main draw lies in offering anonymity to questionable transactions.
Nations Move to Seal the “Anonymous ATM” Loophole
New Zealand is far from alone in cracking down on crypto kiosks.
- Australia’s financial watchdog AUSTRAC placed crypto ATMs on its risk watchlist earlier this year, citing their growing role in scams targeting the elderly.
- Spokane, Washington (USA) enacted a full ban in late 2024, following FBI data linking $5.6 billion in fraud losses that year to crypto ATM usage.
- The UK’s Financial Conduct Authority (FCA) warned as early as 2023 that all unregistered crypto ATM operators were operating illegally and must shut down.
A Clear Signal: Compliance Is the Future Moat
As part of the reforms, the New Zealand government is also proposing a regulatory levy to sustainably fund the AML/CFT framework and expand financial data monitoring. Analysts see this as a sign of deeper engagement in digital financial governance, signaling the end of tolerance for unregulated zones.
Experts believe the global crypto sector is entering a “de-anonymization” phase. As regulations tighten, risky financial channels will shrink, and licensed, transparent exchanges will gain greater legitimacy and user trust.
From New Zealand to Australia, the U.S., and the UK, global regulators are drawing a clearer roadmap: embrace innovation, but don’t give crime a hiding place.
Cryptocurrency is no longer the “digital gold of the underworld.” It is gradually stepping into the spotlight of mainstream finance—and the shutdown of crypto ATMs is just the tip of the regulatory iceberg.