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 scammers.
The measure, included in the Liberal government’s spring economic update released on Tuesday, would eliminate crypto ATMs across the country. Authorities described the machines as a “primary way” to defraud victims and launder illegal money.
“To protect Canadians by closing the primary way for scams to defraud victims and for criminals to dispose of crime proceeds, it plans to ban the machines altogether,” the government said.
A crypto ATM (Automated Teller Machine) may seem similar to a traditional cash machine that withdraws money from your bank account, but it works very differently. Instead of withdrawing cash, these machines let users convert physical cash into cryptocurrencies like Bitcoin, which can be sent to digital wallets anywhere in the world, bypassing traditional banking channels. This is where the risk of money-laundering comes in.
The proposal follows growing concerns from law enforcement and regulators that crypto ATMs have become a hotbed of fraud schemes.
A 2023 internal analysis by FINTRAC, Canada’s financial intelligence agency, found that Bitcoin ATMs are likely to remain the “primary method” that fraudsters use to collect and launder funds from victims.
Canadian lawmakers are debating banning crypto as a payment method for election donations, citing concerns about the anonymity of fund transfers.
Canada was home to the first Bitcoin ATM, which was installed in a downtown Vancouver coffee shop in 2013.