Canada to Ban Crypto ATMs and Create New Financial Crimes Agency

Key facts

• Canada has nearly 4,000 cryptocurrency ATMs, the most per capita in the world.
• The government proposes to ban all crypto ATMs over fraud and money laundering concerns.
• A bill to create the Financial Crimes Agency (FCA) completed its first reading in parliament this week.
• The FCA will investigate and prosecute financial crimes, taking over from Fintrac and the RCMP.
• Fintrac uncovered $45bn in transactions from money laundering and related disclosures last year.
• estimated over US$3tn in illicit funds moved through the global financial system.
• The US under Trump has weakened financial crime enforcement, including a pardon of Binance founder Changpeng Zhao.
• An Edmonton-based crypto company says the ban may not address the root of fraud prevention.

Canada Targets Crypto ATMs and Financial Crime with New Agency

Canada is set to ban cryptocurrency ATMs and create a powerful new law enforcement agency to investigate financial crime, marking a sharp departure from the approach of the United States, where federal investigators have been weakened and the White House has pardoned convicted money launderers. The legislation, introduced by the governing Liberals, would establish the Financial Crimes Agency (FCA) to investigate and prosecute financial crimes. The bill completed its first reading in parliament this week and, with the Liberals holding a parliamentary majority, is expected to move quickly through both houses.

Crypto ATM Ban Targets Fraud and Money Laundering

In addition to the new agency, Canada will ban cryptocurrency ATMs, which officials say have been exploited by scammers to defraud victims and by criminals to launder proceeds of crime. Canada has nearly 4,000 crypto ATMs, the highest number per capita of any country. The ban follows a public inquiry that found Canada lacked a cohesive anti-money-laundering strategy, placing it behind international peers. The inquiry's findings spurred the government to act, with the ATM ban seen as a direct response to mounting fraud cases.

Edmonton Crypto Firm Questions Effectiveness of Ban

An Edmonton-based cryptocurrency company has expressed skepticism about the proposed ban, arguing that eliminating ATMs may not address the root causes of fraud. The company, which operates in the sector, said it wants to work with federal officials to develop more targeted measures. “We’re sending the bill to the landlord,” the company stated, suggesting that the ban could shift responsibility without solving underlying issues. The firm advocates for collaboration with regulators to create effective fraud prevention mechanisms.

New Agency to Fill Gaps Left by Fintrac and RCMP

The Financial Crimes Agency will take on the role of investigating and prosecuting financial crimes, a mandate that currently falls to Fintrac and the Royal Canadian Mounted Police. Fintrac, Canada’s financial intelligence unit, uncovered $45bn in transactions last year related to money laundering, terrorist financing, sanctions evasion, and other disclosures. However, Fintrac does not have the power to arrest or prosecute; it passes cases to police. Jessica Davis, a former intelligence analyst with Canada’s spy agency who now runs Insight Threat Intelligence, said the RCMP has been “unable and unwilling” to sustain financial crime investigations due to a lack of funding, skills, resources, and political will. “Financial crimes investigations are long, complex and require sustained resources, which I’m hopeful we’re now going to see put in place,” she said.

Global Context: Contrast with US Approach

Canada’s move stands in stark contrast to the United States, where the Trump administration has weakened financial crime enforcement. President Donald Trump pardoned Changpeng Zhao, the founder of Binance, after Zhao pleaded guilty to money laundering charges. Binance was ordered to pay a record $4.3bn penalty for facilitating terrorist financing. In a January letter, senior Democrats called for an investigation into Trump’s decision to shift more than 25,000 personnel from investigating fraud, tax evasion, and money laundering to immigration enforcement. Senator Elizabeth Warren of Massachusetts said, “The Trump administration is letting white-collar criminals off the hook for all kinds of wrongdoing.”

Scale of the Problem: Trillions in Illicit Funds

on the scale of financial crimes estimated that more than US$3tn in illicit funds moved through the global financial system in the previous year. The largest contributors were money laundering for human and drug trafficking, as well as terrorist financing. found these activities had “devastating economic and social impact” on citizens. Davis noted that the $45bn figure uncovered by Fintrac “could be too high or far too low – we just don’t fully know the scope of financial crime in this country.” The new agency aims to provide a more comprehensive response.

Outlook: Legislation Moves Forward Amid Debate

With the Liberals’ majority, the FCA bill is expected to pass quickly. The crypto ATM ban, however, faces pushback from industry players who argue for more nuanced solutions. The Edmonton-based company’s call for collaboration suggests that the final regulations may involve some industry input. The creation of the FCA represents a significant investment in enforcement capacity. “The fact we’re actually seeing the creation of a new enforcement agency is a meaningful investment and hopefully signals the understanding of the seriousness of the challenge,” Davis said.

The bottom line

• Canada will ban cryptocurrency ATMs, citing fraud and money laundering concerns.
• A new Financial Crimes Agency will investigate and prosecute financial crimes, replacing Fintrac and RCMP in this role.
• The legislation follows a public inquiry that found Canada lacked a cohesive anti-money-laundering strategy.
• Canada has nearly 4,000 crypto ATMs, the most per capita globally.
• The US under Trump has weakened financial crime enforcement, contrasting with Canada's approach.
• An Edmonton crypto firm questions the ban's effectiveness, urging collaboration with regulators.