New Zealand Clamps Down on Crypto ATMs in Aggressive AML Overhaul

Regulators just pulled the plug on crypto's cash gateway—no warning, no compromise.

The crackdown goes live

New Zealand's Financial Markets Authority (FMA) is freezing all cryptocurrency ATM operations effective immediately. The move targets anonymous transactions that bypass traditional KYC checks—a loophole that's funneled millions in untraceable funds.

Privacy vs. surveillance: The AML endgame

While privacy advocates scream overreach, the FMA claims these machines became magnets for money laundering. Funny how governments always discover 'financial threats' right when decentralized gains momentum.

The collateral damage

Local crypto businesses face instant obsolescence. Meanwhile, banks quietly celebrate another win against disruptive fintech—because nothing secures legacy profits like regulatory barriers.

Crypto ATMs ban

A key component of the government’s reform package is the proposed ban on crypto ATMs, which authorities say are often exploited to convert illicit cash into digital assets.

McKee stated that shutting down these machines WOULD disrupt a common method of laundering money through cryptocurrencies.

According to Bitcoin ATM Radar data, New Zealand ranks eighth globally in the number of active crypto ATMs, with 221 units currently in operation. A ban would likely dismantle this network entirely.

This decision aligns with international efforts to restrict crypto ATM access to curb illicit financial flows. Germany seized $28 million from illegal crypto ATMs in 2024, while Australia and several US states, including North Dakota, have rolled out tighter regulations targeting fraud and abuse tied to these machines.

International cash transactions limit

In addition to banning crypto ATMs, New Zealand plans to limit international cash transfers to $5,000.

The aim is to restrict the amount of money that can be moved offshore in a single transaction, reducing the capacity of criminal organizations to shift large sums undetected.

The proposed reforms also include amending specific AML/CFT compliance requirements for lawful businesses, enabling authorities to concentrate resources on higher-risk entities.

She said:

“The FIU will be able to order the production of important contextual information other businesses on the financial activities of persons of interest. This will enable the more effective development of the financial intelligence needed to bring the criminals to justice.”

McKee pointed out that these changes are designed to align New Zealand with global standards and enhance the country’s ability to prevent financial crime.

She concluded:

“Since 2019, the global financial and regulatory landscape has shifted significantly. We need a smarter, more agile AML/CFT system – one that targets criminals ability to launder money, while enabling New Zealand businesses to operate efficiently and competitively.”