Crypto ATMs linked to $160 million in illegal transactions since 2019

A recent report by blockchain intelligence firm TRM Labs reveals that crypto ATMs have processed at least $160 million in illicit transactions since 2019.

These machines, which allow users to exchange cash for cryptocurrencies, are particularly vulnerable to fraud and money laundering due to weaker Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols compared to traditional cryptocurrency exchanges.

The report indicates that, in 2023 alone, illicit transactions through crypto ATMs accounted for 1.2% of their total volume, a higher proportion than the 0.63% seen across the broader crypto industry.

TRM Labs highlighted that this gap underscores the unique risks associated with crypto ATMs.

Unlike standard exchanges, these ATMs often lack stringent KYC and AML measures, making them a target for criminals looking to move funds anonymously.

Further analysis from TRM Labs found that more than $30 million of the illicit volume in 2023 was connected to known scam addresses.

This points to the role that crypto ATMs play in facilitating fraudulent schemes and laundering money.

The findings have drawn attention from global regulators who are stepping up efforts to address these risks.

Several countries have intensified their scrutiny of the cash-to-crypto sector.

In Germany, authorities recently seized 13 unlicensed Bitcoin ATMs and confiscated nearly EUR 250,000 in cash, reflecting ongoing actions to combat illegal activities tied to these machines.

Similar enforcement efforts have been observed in the UK and the United States, where regulatory bodies have shut down numerous illegal ATMs in recent years.

Meanwhile, the number of crypto ATMs in Australia has surged, increasing 17 times over the past two years, positioning the country as the third-largest market for these machines globally.

While this growth indicates rising demand for digital asset access, it also raises concerns about potential misuse.

Australian authorities are increasing oversight to ensure that operators comply with AML regulations, balancing innovation with financial security.