In a statement last year, police outlined the laundering technique: illicit cash is put into an ATM in return for digital assets, which are then spun through many transactions until their origins are nearly impossible to trace.

Crypto kiosks dominate the cash-to-crypto industry, which has processed at least $160 million in illicit volumes globally since 2019, according to TRM. Australia as a whole saw about $223 million of illegal digital-asset activity from 2022 to 2023, consultancy Chainalysis Inc. estimates.

Teller machines make up a small slice of worldwide trading in the crypto market, whose value exceeds $2 trillion. In Australia, any provider of digital currency exchange must register with the Australian Transaction Reports and Analysis Centre, or Austrac.

Gambling Culture

In response to questions about the risks from crypto teller machines, a spokesperson for the Australian Taxation Office said that addressing technology-enabled crime is a priority focus area for the ATO-led Serious Financial Crime Taskforce.

Another piece of the puzzle is the entrenched gambling culture in the country of 27 million people, whose per capita losses on legal forms of gambling are the highest globally, according to estimates cited by the nation’s health and welfare institute. That love for betting spills over into wagering on volatile crypto coins, some of which have surged in the past year.

Meanwhile, local banks have curbed the ability to transact with digital-asset exchanges, making it harder for some to trade crypto. Commonwealth Bank of Australia, National Australia Bank Ltd., Australia & New Zealand Banking Group Ltd. and Westpac Banking Corp. have all imposed restrictions over concerns about scams.

The curbs have prompted more local crypto users to seek “alternate financial platforms,” including overseas ones, said Caroline Bowler, chief executive officer of digital-asset exchange BTC Markets Pty. New entrant CoinFlip is contributing to the increase in kiosks domestically, she added.

‘Parallel’ System

Chicago-based CoinFlip said the value of digital-asset transactions through its ATMs in Australia more than quadrupled in the past year. Given crypto is a “parallel financial system to the fiat system, it makes sense there would be a physical component,” for access to cash, Chief Executive Officer Ben Weiss said.

CoinFlip charges between 6 per cent and 14 per cent in commissions in Australia, less than the 6 per cent to 18 per cent in the US, Weiss said. Earlier this year, the firm launched a trading desk in Australia for customers who want to transact bigger amounts in crypto.

First Published: Sep 01 2024 | 8:48 PM IST