Why crypto ATMs were targeted by New Zealand regulators
On July 17, 2025, New Zealand’s government made a defining move in its ongoing battle against financial crime: It announced a nationwide ban on cryptocurrency ATMs.
The decision, spearheaded by Associate Justice Minister Nicole McKee, is part of a sweeping reform of the country’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime.
Crypto ATMs, kiosks that allow users to convert cash into digital assets like Bitcoin (BTC), have long existed in a regulatory gray area. According to New Zealand’s Ministerial Advisory Group on Transnational, Serious and Organised Crime, the country had more than 220 such machines in operation by April 2025. Typically located in convenience stores, petrol stations, vape shops and laundromats, these ATMs offered easy access to cryptocurrency, often with minimal identity verification.
That convenience, however, came at a cost.
In announcing the ban, McKee pointed to clear and growing evidence that the machines had become a tool for organized criminal activity.
“These are a sound form of money laundering,” she stated in an interview with 1News. “We caught a guy overseas who used crypto to buy meth to send here, and it was over 100 kilograms of it.” One case cited involved 107 million New Zealand dollars ($64 million) allegedly laundered through such channels.
The ability to convert physical cash into digital currency and send it overseas within minutes, without meaningful oversight, made these kiosks ideal for illicit financial flows, including drug trafficking, scams and weapons purchases.
Did you know? Along with crypto ATM ban, Minister Nicole McKee enforced a NZ$5,000 cap on international cash transfers as part of a broader anti–money laundering strategy.
CoinFlip’s response to New Zealand crypto ATM ban
CoinFlip, New Zealand’s largest crypto ATM provider, with around 120 machines, expressed dismay at the announcement, calling it “a step backward for the digital economy.”
The company argued that a more nuanced, regulatory-based approach could have achieved the government’s goals without stifling innovation.
“We believe the Government can achieve their goals while also encouraging innovation by implementing smart, effective regulation that targets bad actors,” CoinFlip said in a public statement.
They proposed alternatives such as wallet pinning, photographic records and pre-transaction risk monitoring to mitigate criminal use while preserving legitimate access. This tension between risk mitigation and digital innovation is at the heart of global debates over cryptocurrency policy.
Is Bitcoin legal in New Zealand?
Yes, Bitcoin is legal in New Zealand. Individuals can buy, sell and hold cryptocurrencies freely, but they are not considered legal tender.
Instead, digital assets like Bitcoin are classified as property under New Zealand law, making them taxable. Income derived 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 has been cautious but progressive: Rather than banning digital assets, it integrates them into existing legal frameworks. While consumer protections remain limited, users are encouraged to deal with registered providers for added recourse.
This legal clarity allows innovation to flourish, but it comes with responsibility. As New Zealand moves to ban crypto ATMs, the broader message is clear: Cryptocurrency is welcome, but criminal misuse is not. Bitcoin may be legal, but the environment around it is becoming more tightly controlled.
Did you know? A retired Australian police officer lost over 40 million Thai baht ($1.1 million) in a crypto scam after being lured into a fake investment by a German national in Thailand.
The broader AML/CFT reforms in New Zealand
The crypto ATM ban is just one facet of a larger AML/CFT reform package introduced by McKee on July 9, 2025.
Other key measures include:
- A NZ$5,000 cap on international cash transfers, aimed at disrupting the flow of criminal funds offshore.
- Enhanced data sharing powers for the Financial Intelligence Unit, allowing it to request real-time information from financial institutions about individuals under investigation.
- Streamlined compliance obligations for low-risk businesses, intended to ease regulatory burdens without compromising enforcement strength.
“Since 2019, the global financial and regulatory landscape has shifted significantly,” McKee noted. “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.”
This dual mandate, agility in enforcement and fairness in compliance, underscores the government’s effort to protect the financial system without stifling legitimate enterprise.
How does New Zealand compare internationally?
New Zealand joins a global wave of crypto ATM crackdowns, opting for a full ban while peers like Australia pursue tighter regulation instead.
New Zealand’s ban places it among a growing list of countries adopting tough stances on crypto ATMs.
- United Kingdom (2022): The Financial Conduct Authority (FCA) effectively banned crypto ATMs by refusing to license any such services under the UK’s Money Laundering Regulations. The few kiosks that operated were considered illegal and subject to enforcement action.
- Singapore (2022): The Monetary Authority of Singapore placed a moratorium on crypto ATMs as part of a broader crackdown on unregulated digital assets, citing public risk and market integrity.
- China (2017): A sweeping ban on nearly all cryptocurrency transactions, including ATM operations, was enforced as part of national financial security measures.
In contrast, Australia, New Zealand’s closest regulatory peer, opted for a more incremental approach. In June 2025, the Australian Transaction Reports and Analysis Centre (AUSTRAC) introduced new compliance rules for crypto ATM operators.
These included a cash deposit and withdrawal cap of 5,000 Australian dollars ($3,260), enhanced KYC checks and mandatory scam alerts. Rather than banning the machines, Australian regulators focused on making them safer and more transparent.
New Zealand, however, chose a cleaner, more definitive route.
