Crypto ATM Use by Seniors Raises Red Flags—AUSTRAC Tightens Rules

Australia’s financial intelligence agency, AUSTRAC, is tightening regulations on crypto ATMs due to concerns over scams and fraud. New restrictions include cash deposit and withdrawal limits as well as mandatory scam warnings.

ATM Scammers Target Senior Citizens

Australia’s financial intelligence agency, AUSTRAC, is implementing stringent new measures for cryptocurrency ATM operators, including refusing to renew one operator’s registration and imposing transaction limits on others. The move comes after an AUSTRAC taskforce identified alarming trends in crypto ATM compliance, particularly their use in scams and fraud.

Brendan Thomas, AUSTRAC CEO, revealed that over several months, the taskforce observed customer activity bearing the hallmarks of illicit financial behavior.

“The taskforce has uncovered disturbing trends which have confirmed that cryptocurrency ATMs are being used for scam/fraud-related transactions,” Thomas stated.

A significant concern highlighted by AUSTRAC is the disproportionate use of crypto ATMs by the 60- to 70-year-old age group. Data from nine crypto ATM providers showed that users over 50 account for almost 72% of all transactions by value, with 60- to 70-year-olds alone responsible for 29%.

In response to these findings, AUSTRAC is now collaborating with law enforcement partners and crypto ATM providers to address suspicious activity. The new conditions placed on operators include a $3,246 (AUD$5,000) limit on cash deposits and withdrawals, enhanced customer due diligence obligations, mandatory scam warnings, and requirements for more robust transaction monitoring.

While the cash limits specifically apply to crypto ATM providers, AUSTRAC expects cryptocurrency exchanges to consider implementing similar limits if they accept cash for crypto transactions. This proactive measure aims to reduce their exposure to money laundering, terrorism financing, and other serious crime risks.

In parallel efforts, the Australia Federal Police (AFP)-led Joint Policing Cybercrime Coordination Centre (JPC3) has developed educational materials. These materials, which provide information on how scams work, warning signs, and how to report and seek help, are being strategically placed near crypto ATMs to educate potential victims.

Regarding AUSTRAC’s refusal to renew the registration of crypto ATM operator Harro’s Empires, Thomas said the decision was made due to ongoing concerns that its ATMs could be exploited. He said the action serves as a warning to other digital currency exchange providers not meeting their responsibilities under the AML/CTF Act.

The rapid proliferation of crypto ATMs in Australia underscores the urgency of these measures. The number of active crypto ATMs has surged from just 23 in 2019 to more than 1,800 currently. AUSTRAC projects almost 150,000 annual transactions, with approximately $178.5 million being moved, predominantly through cash deposits for the purchase of digital assets like bitcoin ( BTC), tether ( USDT), and ethereum ( ETH).

AUSTRAC has pledged to continue monitoring the sector and take further action if necessary to prevent harm. Individuals with concerns about potentially falling victim to a scam or fraud are advised to report it to the police via Reportcyber and Scamwatch.