Canada is proposing a ban on cryptocurrency 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 remove cryptocurrency ATMs across the country. Officials describe the machines as a “primary method” of defrauding victims and laundering illicit funds.
“To protect Canadians and shut down a primary method used by scammers to defraud their victims and by which criminals place cash obtained from crime,” the government said it plans to ban the machines entirely.
Cryptocurrency ATMs (automated teller machines) may sound similar to traditional cash machines that withdraw money from your bank account, but they work very differently. Rather than withdrawing cash, these machines allow users to convert physical cash into cryptocurrencies such as Bitcoin, which can then be sent to a digital wallet anywhere in the world, bypassing traditional banking channels. This is where the risk of money laundering comes from.
The proposal follows growing concerns from law enforcement and regulators that cryptocurrency ATMs have become the centerpiece of fraud schemes.
A 2023 internal analysis by Canada’s financial intelligence agency FINTRAC found that Bitcoin ATMs are likely to remain the “primary method” used by fraudsters to collect and launder money from victims.
Canadian lawmakers are discussing banning cryptocurrencies as payment for election donations, citing concerns about the anonymity of fund transfers.
Canada has its first Bitcoin ATM, installed in a coffee shop in downtown Vancouver in 2013.