The federal government has unveiled a comprehensive strategy to combat financial crimes through its spring economic statement, allocating $352.7 million over five years to establish a new Financial Crimes Agency. As reported by The Canadian Press, the government introduced legislation Monday to create this specialized federal law enforcement agency, which will be headquartered in Ottawa with a mandate to investigate "serious and complex financial crimes, such as money laundering, serious fraud, and major capital market crimes." The agency will also focus on recovering proceeds of crime and will receive $82.1 million in ongoing funding to support its operations.
Canada has implemented a complete ban on Bitcoin ATMs as part of the broader financial crime strategy, with just under 4,000 cryptocurrency ATMs currently operating in the country - the most per capita globally. According to finance officials speaking on background to The Canadian Press, the government cites scammers using ATMs to defraud victims and criminals converting proceeds of crime through these machines. The Liberals' spring economic update specifically referred to crypto ATMs as "a primary method for scammers to defraud victims and for criminals to place their cash proceeds of crime." However, the ban does not prohibit Canadians from purchasing cryptocurrencies from "brick-and-mortar" businesses, maintaining access to digital assets through traditional retail channels.
CBC News' investigation "Feeding Fraud: The Crypto ATM Problem" has revealed the devastating scale of fraud through these machines, with victims reporting the loss of $14.2 million to scams through crypto ATMs in 2024, according to the Canadian Anti-Fraud Centre. The investigation found that Canada's financial intelligence agency, FINTRAC, came to that conclusion in a February 2023 analysis of suspicious transaction reports submitted to the agency. Crypto ATMs are touted as a low-barrier, convenient way to buy or sell crypto, but this accessibility also makes them appealing to fraudsters. Funds are sent quickly, a bank account isn't required, most transactions only require a phone number if depositing under $1,000 and unlike banks, there's no human interaction or teller trained to recognize fraud unfolding.
The government is implementing stricter rules on registration and criminal record checks for businesses providing currency exchange and digital payment services. As reported by The Canadian Press, these measures target criminals who are "increasingly abusing such money service businesses to launder money, finance terrorism, evade sanctions, and defraud Canadians of their hard-earned savings." The Department of Finance will receive $19.6 million over five years with $1.5 million ongoing funding to support these enhanced regulatory measures. Additionally, the Public Prosecution Service of Canada will get $46.2 million over five years and $11.5 million in ongoing funding to handle increased prosecution demands. Separately, lawmakers have advanced Bill C-25, known as the Strong and Free Elections Act, which has passed second reading in the House of Commons and would prohibit political parties, candidates, and associated entities from accepting crypto donations. The bill extends restrictions to leadership campaigns, nomination contests, riding associations, and third-party advertisers, requiring any prohibited contributions to be returned within 30 days.
