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Canada is moving toward enforcing tighter rules on cryptocurrency ATMs after growing concerns about fraud and money laundering. The federal government has included a proposal in its Spring Economic Update that would remove these machines across the country.
Officials say the decision follows reports linking crypto ATMs to rising financial scams and illicit cash movement. The proposal has also come as lawmakers consider wider rules on digital asset use in political financing.
The federal government has proposed a complete ban on crypto ATMs in Canada under its latest fiscal update. Officials said the machines are widely used in scams and criminal cash transfers. The update described them as a ‘primary method for scammers to defraud victims and for criminals to place their cash proceeds of crime.’
The proposal would stop the operation of nearly 4,000 crypto ATMs currently active in the country. Authorities stated that Canadians would still be able to buy digital assets through regulated money services. These services include physical locations that operate under financial rules, unlike most standalone crypto ATMs.
Government documents noted that the aim is to reduce fraud exposure while keeping access to digital currencies through monitored channels. The plan is still at the proposal stage and has not yet become law.
Financial authorities and law enforcement agencies have raised concerns about how crypto ATMs are used in fraud cases. Canada’s financial intelligence agency FINTRAC released findings showing that these machines are often involved in suspicious transactions. The report said crypto ATMs are likely to remain ‘the primary method’ used by fraudsters to collect and move stolen funds.
Investigations have also shown how scammers direct victims to deposit cash into these machines. Once the money is converted into cryptocurrency, it can be sent to digital wallets that are difficult to trace. The lack of in-person verification at most machines has been identified as a key issue in fraud cases.
CBC News reporting also noted that many victims were contacted remotely and instructed to use crypto ATMs under false claims. The absence of real-time support or banking oversight has been linked to delayed fraud detection in several cases.
Other countries have already taken steps to control or restrict crypto ATM use. The United Kingdom created rules requiring registration for operators, which resulted in no legal machines being approved. This has effectively stopped crypto ATM operations in the country.
Australia introduced transaction limits after concerns from financial regulators and police agencies. New Zealand has also considered banning the machines entirely. These actions were introduced in response to similar fraud patterns linked to cryptocurrency cash conversion services.
In the United States, some states have placed limits on daily transactions and fees. Reports have also shown that Americans lost hundreds of millions of dollars in scams involving crypto ATMs in recent years. Older users have been identified as frequent targets in these cases.
Canada’s proposal is part of this wider regulatory response. Lawmakers are also reviewing whether cryptocurrency should be allowed for political donations. The discussions continue as authorities examine how digital asset services are used across financial systems.
Also Read: Arizona Governor Vetoes Crypto Investment Bills, Signs Strict Bitcoin ATM Regulations
