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Reasons behind the targeting of crypto ATMs by New Zealand regulators
On July 17, 2025, the government of New Zealand took a significant step in its ongoing struggle against financial misconduct: It declared a nationwide prohibition on cryptocurrency ATMs.
The determination, led by Associate Justice Minister Nicole McKee, is part of a comprehensive overhaul of the nation’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework.
Crypto ATMs, machines that enable users to exchange cash for digital currencies such as Bitcoin (BTC), have historically operated in a regulatory gray zone. As per New Zealand’s Ministerial Advisory Group on Transnational, Serious and Organised Crime, the nation had over 220 such devices in function by April 2025. Usually situated in convenience stores, gas stations, vape shops, and laundries, these ATMs provided straightforward access to cryptocurrency, frequently requiring minimal identity verification.
However, this ease of access came with drawbacks.
In her announcement of the ban, McKee highlighted the evident and escalating proof that these machines had turned into instruments for organized crime.
“These serve as a reliable means of money laundering,” she remarked during a discussion with 1News. “We apprehended someone abroad who utilized crypto to purchase meth for transport here, amounting to over 100 kilograms.” One instance mentioned involved 107 million New Zealand dollars ($64 million) supposedly laundered through such methods.
The capability to transform physical cash into digital currency and dispatch it internationally within moments, devoid of substantial supervision, positioned these kiosks as prime candidates for illegal financial transactions, including drug trafficking, fraud, and arms acquisitions.
Did you know? In addition to the crypto ATM prohibition, Minister Nicole McKee implemented a NZ$5,000 limit on international cash transfers as part of a wider anti-money laundering initiative.
CoinFlip’s reaction to New Zealand’s crypto ATM prohibition
CoinFlip, New Zealand’s largest provider of crypto ATMs, boasting approximately 120 machines, voiced disappointment regarding the announcement, dubbing it “a regression for the digital economy.”
The firm contended that a more nuanced, regulation-focused strategy could have met the government’s objectives without hindering innovation.
“We believe the Government can fulfill their goals while simultaneously fostering innovation by instituting intelligent, effective regulations that target malicious actors,” CoinFlip asserted in a public release.
They suggested alternatives like wallet pinning, photographic documentation, and pre-transaction risk assessments to reduce criminal utilization while maintaining legitimate accessibility. This ongoing conflict between risk management and digital progression is central to international discussions regarding cryptocurrency governance.
Is Bitcoin permitted in New Zealand?
Yes, Bitcoin is permitted in New Zealand. Individuals can freely buy, sell, and hold cryptocurrencies, but they are not recognized as legal tender.
Instead, digital assets like Bitcoin are designated as property under New Zealand law, making them taxable. Earnings from crypto trading or mining are liable for income tax, and businesses in the sector must register and adhere to Anti-Money Laundering and financial conduct regulations.
The government’s stance has been cautious yet progressive: Rather than outlawing digital assets, it incorporates them into existing legal structures. While protections for consumers remain limited, users are encouraged to engage with registered providers for added recourse.
This legal clarity enables innovation to thrive, but it comes with obligations. As New Zealand moves towards prohibiting crypto ATMs, the broader implication is evident: Cryptocurrency is accepted, but its criminal exploitation is not. Bitcoin may be lawful, but the surrounding environment is tightening.
Did you know? A retired Australian police officer lost over 40 million Thai baht ($1.1 million) in a crypto scam after being enticed into a fraudulent investment by a German national in Thailand.
The wider AML/CFT reforms in New Zealand
The crypto ATM prohibition is merely one component of a broader AML/CFT reform initiative introduced by McKee on July 9, 2025.
Other significant measures comprise:
- A NZ$5,000 cap on international cash transfers, aimed at interrupting the movement of criminal funds offshore.
- Augmented data sharing powers for the Financial Intelligence Unit, permitting it to request real-time data from financial institutions about individuals under scrutiny.
- Streamlined compliance requirements for low-risk businesses, intended to alleviate regulatory burdens without compromising enforcement efficacy.
“Since 2019, the global financial and regulatory landscape has altered significantly,” McKee observed. “We require a more intelligent, adaptable AML/CFT system that addresses criminals’ capacity to launder money while allowing New Zealand businesses to operate effectively and competitively.”
This dual objective, agility in enforcement and fairness in compliance, highlights the government’s commitment to safeguarding the financial system without obstructing legitimate enterprise.
How does New Zealand align internationally?
New Zealand joins a global trend of crackdowns on crypto ATMs, opting for a total ban while counterparts like Australia pursue stricter regulations instead.
New Zealand’s prohibition places it among a rising list of nations adopting rigid positions on crypto ATMs.
- United Kingdom (2022): The Financial Conduct Authority (FCA) effectively barred crypto ATMs by declining to license any such services under the UK’s Money Laundering Regulations. The few kiosks that operated were deemed illegal and subject to enforcement actions.
- Singapore (2022): The Monetary Authority of Singapore imposed a moratorium on crypto ATMs as part of a heightened crackdown on unregulated digital assets, citing public hazards and market integrity.
- China (2017): A widespread ban on nearly all cryptocurrency transactions, including ATM operations, was instituted as part of national financial security measures.
Conversely, Australia, New Zealand’s closest regulatory counterpart, opted for a more gradual approach. In June 2025, the Australian Transaction Reports and Analysis Centre (AUSTRAC) unveiled new compliance mandates for crypto ATM operators.
These included a cash deposit and withdrawal limit of 5,000 Australian dollars ($3,260), enhanced KYC protocols, and obligatory scam notifications. Rather than prohibiting the machines, Australian regulators focused on enhancing their safety and transparency.
New Zealand, however, opted for a clearer, more decisive path.
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