Why cryptographic ATMs have been targeted by New Zealand regulators
On July 17, 2025, the New Zealand government made a critical move in the ongoing battle against financial crime. It announced a nationwide ban on cryptocurrency ATMs.
The decision, led by Assistant Judge Nicole McKey, is part of a drastic reform of the country’s anti-money laundering and countering the funding of the Terrorism (AML/CFT) administration.
Crypto ATMS is a kiosk that allows users to convert cash into digital assets such as Bitcoin (BTC), and has long been in the grey area of regulations. By April 2025, more than 220 such machines were operating in the country, according to a New Zealand ministerial advisory group on severe organized crime across borders. Usually found in convenience stores, gas stations, steam marks and laundromats, these ATMs often had easy access to cryptocurrencies with minimal identity definitions.
However, the convenience was expensive.
In announcing the ban, Mackey pointed to clear and growing evidence that machines have become tools for organized criminal activity.
“These are healthy forms of money laundering,” she said in an interview with 1News. “We caught a man from abroad who used Crypto to buy Meth and sent it here. It was over 100 kilograms.” One case cited included $107 million ($64 million) allegedly washed through such a channel.
With its ability to convert physical cash into digital currency and send it abroad within minutes without meaningful surveillance, these kiosks have become ideal for illegal financial flows such as drug trafficking, fraud, and weapons purchases.
Did you know? In addition to the ban on Crypto ATMs, Minister Nicole McKee has enforced a $5,000 cap on international cash transfers as part of a broader money laundering strategy.
Coinflip’s response to the New Zealand Crypto ATM ban
Coinflip, New Zealand’s largest Crypto ATM provider, has around 120 machines, disappointing at the announcement and calling it a “setback in the digital economy.”
The company argued that a more nuanced, regulatory-based approach may have achieved government goals without thwarting innovation.
“We believe that governments can also encourage innovation by implementing smart and effective regulations targeting bad actors while achieving their goals,” Coinflip said in an official statement.
They proposed alternatives such as wallet pinning, photo recording and pre-transaction risk monitoring to mitigate criminal use while maintaining legal access. This tension between risk mitigation and digital innovation is at the heart of the global debate on cryptocurrency policy.
Is Bitcoin in New Zealand legal?
Yes, Bitcoin is legal in New Zealand. Individuals are free to buy and sell and hold cryptocurrencies, but are not considered legal currency.
Instead, digital assets like Bitcoin are classified as assets under New Zealand law and are subject to taxation. Income from crypto trading or mining is subject to income tax, and businesses operating in the sector must register and comply with anti-money laundering and financial conduct regulations.
The government’s approach was cautious, but progressive. Rather than banning digital assets, they integrate them into existing legal frameworks. Consumer protection remains limited, but users are encouraged to address registered providers.
This legal clarity allows innovation to flourish, but it comes with responsibility. As New Zealand moves to ban crypto ATMs, the broader message becomes clear. Cryptocurrency is welcome, but criminal misuse is not welcome. Bitcoin may be legal, but the surrounding environment is more tightly controlled.
Did you know? The retired Australian police officer lost more than 40 million Thai baht ($1.1 million) in crypto fraud after being invited to fake investments from Thai German citizens.
New Zealand’s broader AML/CFT reforms
The Crypto ATM ban is just one aspect of the larger AML/CFT reform package introduced by McKee on July 9, 2025.
Other important measurements are:
- NZ $5,000 cap of international cash transfers aimed at disrupting criminal funding flows offshore.
- Enhanced data sharing authority for the Financial Intelligence Unit allows you to request real-time information from financial institutions about individuals under investigation.
- Compliance obligations for low-risk companies have been streamlined, with the aim of easing regulatory burdens without compromising enforceability.
“The global financial and regulatory landscape has changed dramatically since 2019,” Mackey noted. “We need a smarter, more agile AML/CFT system than targeting criminal capabilities while enabling New Zealand businesses to operate efficiently and competitively.”
This dual mission, agility in enforcement and fairness in compliance highlights the government’s efforts to protect the financial system without thwarting legal businesses.
How do New Zealand compare internationally?
New Zealand joins the global wave of crypto ATM crackdowns and opts for a complete ban while peers like Australia pursue stricter regulations instead.
The New Zealand ban places it on the growing list of countries that have adopted a strict stance on crypto ATMs.
- UK (2022): The Financial Conduct Authority (FCA) effectively banned crypto ATMs by denying licenses for such services under the UK money laundering rules. A few kiosks that operated were deemed illegal and were subject to enforcement action.
- Singapore (2022): Singapore’s financial authorities have placed a pause on crypto ATMs, citing public risks and market integrity as part of a broader crackdown on unregulated digital assets.
- China (2017): The sweep ban on almost all cryptocurrency transactions, including ATM operations, has been implemented as part of national financial security measures.
In contrast, Australia, New Zealand’s closest regulatory peer, chose a more progressive approach. In June 2025, the Australian Transaction Reporting and Analytics Centre (Austrac) introduced new compliance rules for cryptographic ATM operators.
These included AUD 5,000 ($3,260) cash deposits and withdrawal caps, enhanced KYC checks, and mandatory fraud alerts. Rather than banning machines, Australian regulators focused on making them safer and more transparent.
However, New Zealand has chosen a cleaner, more decisive route.
