New Zealand Rejects Blanket Crypto ATM Ban and Moves Toward Targeted Restrictions

Shift from ban-in-principle to targeted rules

Cabinet had agreed in principle in June 2025 to ban crypto ATMs, but that position was left open pending additional analysis. According to McKee, the later review found that less restrictive measures could address the risks identified by officials while still allowing lawful use.

The government now plans to add regulation-making powers to the AML/CFT Omnibus Amendment Bill. McKee said banning a product or service is a serious step and that the evidence considered by Cabinet did not support a full ban at this stage.

What powers the government wants

Under the proposed approach, ministers could be given authority to impose caps on cash transactions involving virtual assets. The same framework could also permit cash payments for high-risk virtual assets to be prohibited if clear evidence of harm emerges in New Zealand.

No cash threshold has been announced, and officials have not specified which assets might be deemed high risk. McKee said officials would consult crypto providers and users on how the safeguards should work in practice. The government was expected to introduce the AML/CFT Omnibus Amendment Bill later in July, although the Ministry of Justice listed the broader timing as mid-2026.

Crypto businesses are already within New Zealand’s anti-money laundering and countering financing of terrorism regime. The Department of Internal Affairs says virtual asset service providers already have AML/CFT obligations.

Why crypto ATMs are under scrutiny

Crypto ATMs generally allow users to insert cash and buy digital assets such as Bitcoin. In New Zealand, most are described as one-way machines, meaning they accept cash for crypto purchases but do not convert digital assets back into banknotes.

Industry estimates put the country’s network at around 200 machines, located in places including dairies, petrol stations and vape shops, from Auckland to Invercargill. Officials are concerned that the cash-based nature of these transactions can make it harder to identify the original source of funds before the value moves into the digital-asset system, where it may then be transferred rapidly between wallets or across borders.

McKee said the machines present risks when criminals use cash to move money into virtual assets quickly and anonymously. The government’s goal, she said, is to gain tools to address that threat without blocking all legitimate access.

Scams and consumer losses

Authorities have also pointed to consumer harm linked to crypto ATM scams. Fraudsters may pose as police, tax officials, banks or technical support workers, or they may lure victims through fake job offers or sham investment schemes. Victims can be told to withdraw cash, visit a crypto ATM and scan a QR code connected to a wallet controlled by the scammer.

The Banking Ombudsman reported two serious cases in March 2026. In one, a person lost NZ$31,500 after responding to a fake job offer. In another, a victim deposited nearly NZ$65,000 over six months believing the payments were legitimate investments.

International data has reinforced those concerns. In the United States, the FBI said it received 13,460 complaints involving cryptocurrency kiosks in 2025, with adjusted losses of almost $388 million. The agency said some cases involved other payment methods as well. More than half of the complaints involved people over 50, while complaints rose 23% and losses increased 58% from 2024. Australia’s AUSTRAC has also said that most high-value crypto ATM transactions there were directly linked to scams or money mules, with substantial amounts also reaching wallets in high-risk jurisdictions.

Balancing risk and lawful access

The policy review did not recommend a full ban partly because officials found there are lawful uses for the machines, including by cash-reliant New Zealanders seeking access to or investment in virtual assets. Even so, crypto ATM use can be expensive. Published estimates put transaction fees at between 6% and 19%, and some operators may also charge fixed fees, network fees and exchange-rate markups.

For now, New Zealand has not imposed a blanket ban or a nationwide government cash limit for crypto ATM use. The Banking Ombudsman has warned the public to be highly suspicious of anyone instructing them to withdraw cash and deposit it into a crypto ATM.