The use of cryptocurrency ATMs is rapidly expanding in New Zealand, with over 200 machines now operating nationwide. These ATMs can be found in a variety of locations, including dairies, shopping malls, and petrol stations.
However, law enforcement agencies are closely monitoring these machines, as criminals are taking advantage of the expanding technology for illicit activities.
Daniel Frost from the police’s financial intelligence unit stated that cryptocurrency ATMs are susceptible to criminal misuse.
Financing terrorism, facilitating illegal firearms purchases, and money laundering are among the risks associated with these systems. The financial intelligence unit reported that some of these threats have already been identified and prevented within the country.
“We’re starting to see evidence of these types of activities occurring close to New Zealand, if not even on New Zealand shores,” Frost said.
Police stated that stricter regulations in the sector may be necessary, but for the time being, they are making full use of the resources available to them and collaborating closely with international agencies experienced in handling criminal cryptocurrency transactions.
Meanwhile, a spokesperson for FlipCoin, which owns over half of New Zealand’s crypto ATM machines, has expressed perspectives and stated that the company is firmly committed to preventing scams targeting its clients and actively collaborates with law enforcement and regulatory authorities.
The spokesperson said the company has implemented various user protection measures designed to detect and prevent criminal activity.
“We invest heavily in compliance and customer protections such as blockchain analytics to stop fraud and intercept attempted transactions to known high-risk wallets, display relevant consumer warnings on our ATMs, and provide 24/7 customer support. Tools like blockchain analytics go beyond what is even available for traditional finance transaction monitoring.”
“We have a comprehensive onboarding process in place: our ATMs are subject to the same anti-money laundering and know your customer regulations as traditional financial institutions, as well as other virtual asset service providers operating lawfully in New Zealand.”