Canada’s Department of Finance is proposing a sweeping ban on Bitcoin and cryptocurrencies through automated teller machines, aiming to combat an increasing surge of scams targeting Canadians. This bold move aligns with similar regulatory actions in several U.S. states, including Indiana and Tennessee, as authorities seek to reinforce consumer protection.
In an economic update released recently, the government labeled crypto ATMs as “a primary method” utilized by scammers to exploit unsuspecting Canadians, particularly seniors and vulnerable populations. The proposed ban would render it illegal to operate these self-service kiosks, often found in gas stations and convenience stores, while still permitting transactions at brick-and-mortar locations where customers can purchase digital assets with physical cash. This stipulation ensures that exchanges are conducted in the presence of employees, who are mandated to oversee compliance and operations.
Provinces like Quebec have already instituted regulations requiring operators of crypto ATMs to obtain licenses as money-services businesses (MSBs). However, the federal government’s new proposal aims to supersede these localized frameworks by enacting a nationwide prohibition against the machines, reinforcing its commitment to tackle financial fraud.
The initiative was propelled by insights from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which has been actively working to disrupt money laundering, terrorism financing, and other financial crimes associated with MSBs. Earlier this year, FINTRAC revoked licenses for 84 MSBs, with a significant number involved in the transfer of virtual currency amongst them.
According to Coin ATM Radar, Canada is currently home to nearly 4,000 crypto ATMs, with more than a quarter located in Montreal, the nation’s second-largest city. In comparison, the United States boasts over 30,000 of these machines. Scammers often impersonate government officials or tech support personnel, coercing individuals into depositing cash into crypto ATMs. Once converted, victims are manipulated into sending the funds directly to the scammers’ wallets, leaving them at a loss.
Emerging data shows the alarming trend of scams affecting older Americans, with the FBI reporting that individuals over 60 lost $257 million to crypto ATM-related scams last year, marking a 58% increase from the previous year. In response, Indiana has completely banned these machines, while Tennessee is set to implement a similar prohibition with a new law taking effect soon.
Internationally, other nations have mirrored these concerns, with countries like New Zealand instituting bans on crypto ATMs to curb money laundering issues. As Canada pushes forward with its proposed ban, it joins a global movement aimed at addressing the rapidly evolving landscape of cryptocurrency regulation and protection for consumers against fraud.
