- Authorities have limited cross-border cash transfers to $5,000 to reduce money laundering risks.
- New AML laws focus on balancing crime prevention with support for compliant businesses.
- The crypto ATM ban is part of broader reforms targeting organized crime and fraud.
New Zealand has banned crypto ATMs across the country in an attempt to seal a source of money laundering and illicit money. The government further established a ceiling of 5,000 dollars on all international cash transactions. This move further fortifies its position on checking financial crime and strengthening anti-money laundering (AML) measures.
Source – coinatmradar.com
The prohibition is a part of the overall transformation of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) system. It eliminates over 220 cryptocurrency kiosks that have been functioning in the country.
The action by the government is based on the fact that these machines have been an easy way. Criminal groups can easily turn cash into other digital forms of money through them. This makes it easy to transfer money across borders in relation to drug dealing and fraud.
In a recent government report, it was noted that criminals are increasingly using crypto ATM machines to hide their money trails, as well as to avoid the scrutiny that comes with standard banks.
These machines, which enable people to trade cash in cryptocurrencies such as Bitcoin, have been cited as a major weak point in the New Zealand financial system, which leads to quick and anonymous money transfer overseas.
According to a government official, by banning crypto ATMs, we are cutting criminals off the ability to convert cash into high-risk investments. These include cryptocurrencies.
The official emphasized interfering with criminal activities while ensuring no extra regulatory overheads burden legitimate businesses.
The ban is in line with other jurisdictions that have imposed limits on crypto ATM transactions. Australia, for example, has also increased compliance standards among operators.
Enhanced Surveillance and $5,000 Overseas Transfer Cap
The recent AML/CFT revisions give the Financial Intelligence Unit (FIU) the enhanced mandate to observe and conduct an investigation into suspicious financial transactions. Banks and other reporting institutions are now required to continuously report details of persons who are suspected of engaging in money laundering or financing terrorist activities.
New Zealand set the international cash transfer cap at $5,000 to restrict the flow of large sums of money. Organized crime groups often use this strategy. This ban will cover any kind of cross-border cash transfer, whether done using money remittance services or banks.
According to the April report of the government on transnational crime, the international cash transfers were noted as a major channel of laundering money acquired through drug sales and online fraud. Parliament is currently reviewing two bills in the reform package and plans to pass them by the end of the year.
Lawmakers designed these bills to help honest businesses comply with the law. They also aimed to preserve the integrity of New Zealand’s financial system. The government explained, it is not about lowering standards but using them wisely.
Another aspect of the AML/CFT overhaul is the risk-based approach to customer due diligence. This approach introduces the need to formally determine and document the risk profile of each customer within the financial institutions.
The reforms will centralize AML/CFT supervision to one body and establish a new funding system. They will transfer part of the compliance expenses to reporting organizations.
