Canada is proposing to ban crypto ATMs as part of a broader crackdown on fraud and money laundering, citing growing evidence that the machines have become a key tool for fraudsters.
The measure, included in the Liberal government’s spring economic update released Tuesday, would eliminate crypto ATMs nationwide. Officials described the machines as a “primary method” of defrauding victims and laundering illicit funds.
“To protect Canadians by ending a primary method for fraudsters to defraud their victims and criminals to place the proceeds of their crime,” the government said, it plans to ban these machines altogether.
A crypto ATM (ATM) may look like a traditional ATM that dispenses money from your bank account, but it works very differently. Instead of withdrawing cash, these machines allow users to convert physical cash into cryptocurrencies like bitcoin, which can then be sent to a digital wallet anywhere in the world, while bypassing traditional banking channels. This is where the risk of money laundering comes into play.
The proposal follows growing concerns from law enforcement and regulators that crypto ATMs have become central to fraud schemes.
An internal analysis in 2023 by Canada’s financial intelligence agency, FINTRAC, found that Bitcoin ATMs will likely remain “the primary method” used by fraudsters to collect and launder victims’ funds.
Canadian lawmakers are debating banning crypto as a payment method for election donations, citing concerns about the anonymity of fund transfers.
Canada welcomed the first Bitcoin ATM, installed in a downtown Vancouver cafe in 2013.
