Cryptocurrency ATMs will be banned nationwide in New Zealand. The ruling is one of the new anti-money laundering reforms to combat cash-based financial crime.
Nicole McKee, an associate justice minister, confirmed the changes, saying that the measure targets criminals who exchange physical cash for digital assets.
The government will increase enforcement and regulation. A new economic sanctions regime will help authorities detect and interfere with money laundering operations across economic sectors.
Stronger Regulations to Target Financial Crime
The new bill will better equip the Financial Intelligence Unit to request information from banks and dealing businesses. The law can provide some situational context about a person of interest and questionable transactions. Reforms are meant to increase monitoring and strike a balance in the operations of companies that comply.
A new rule also limits international cash transfers to $ $5,000. This restriction applies to all remittance services in New Zealand. The authorities are convinced that the ban will complicate cash offshoring by organized criminal groups.
Source: Coin ATM Radar
The reforms come after there was concern about the misuse of crypto ATMs, where anonymous cash conversion into digital currency was taking place. New Zealand’s move is contrary to global trends. As of January 2023, there are more than 38,000 cryptocurrency ATMs across 67 nations, and they are made and supported by hundreds of different manufacturers and service providers.
Crypto ATMs Outlawed Despite Global Expansion
The world crypto ATM system is expanding. It has 38,537 active machines worldwide, with services offered in 67 countries. These apparatus open the gateway to Bitcoin and other virtual money-making using deposits of physical cash. Most of them have local AML regulations, and identity verification and transaction limits vary.
Whereas the rest of the Jurisdictions view crypto ATMs as regulated financial services, New Zealand’s position is contrary to this perception. Authorities believe that the elimination of such machines will seal a smuggler of illicit money’s holes. The government considers this to be needed in order to defend the financial system and enhance more general AML/CFT ambitions.
Focus on Risk-Based Business Relief Measures
The government is undertaking to assist the businesses that will abide by the ban. Phone amendment Two amendment measures are in Parliament to reduce the load on low-risk entities.
Other requirements, including verifying the addresses of lower-tier clients and conducting due diligence against low-tier trusts, may be scrapped.
By the end of 2025, the affected businesses will be relieved practically. The government is aiming to have a more versatile and streamlined AML framework.
This strategy provides a balance between controlling criminal risks and ensuring efficient operations that ensure New Zealand remains competitive in the provision of financial services.