Australian authorities are preparing to clamp down on cryptocurrency ATMs as part of a broader initiative to tackle issues related to money laundering, terrorism financing, and other serious criminal activities.

The nation’s financial crime agency, AUSTRAC, reports that a significant 85 percent of transactions conducted by the primary users of these ATMs are linked to scams or involve individuals known as money mules, who unlawfully transfer funds for criminal organizations.

AUSTRAC, in collaboration with law enforcement, has discovered that when traditional financial institutions block transactions, criminals often resort to using crypto ATMs as an alternative.

According to federal government data, a staggering 99 percent of transactions through these machines involve cash deposits, which are considered highly susceptible to money laundering.

Home Affairs Minister Tony Burke is set to announce new reforms that will empower the AUSTRAC chief executive with the authority to restrict or ban specific high-risk products, services, or delivery methods, including those involving cryptocurrency ATMs.

He will also outline new powers to disrupt money launderers using mule accounts, where criminals take over legitimate bank accounts, which they often obtain from from international students or other visa holders.

The government’s Visa Entitlement Verification Online Terms and Conditions will be changed to give financial institutions more access to visa information, to help them identify and close mule accounts.

Burke says the crypto reforms are about “legitimising the good actors and shutting out the bad” in the currency.

Over the past six years, the number of active crypto ATMs in Australia has increased more than 15-fold, from 23 to more than 1600 today.