As part of its efforts to combat fraud and money laundering, Canada is considering banning crypto ATMs due to their increasing use by scammers. This proposal was detailed in the Liberal government’s Spring Economic Update released this Tuesday, which aims to eliminate these machines across the country. Authorities have identified crypto ATMs as a major avenue for both defrauding victims and laundering illegal funds.
The government stated its intention to protect citizens by shutting down what it calls ‘a primary method’ used by scammers and criminals to handle their illicit earnings. Unlike traditional ATMs that dispense cash, crypto ATMs allow users to exchange physical money for cryptocurrencies like bitcoin, which can then be transferred globally without going through conventional banking systems, thus posing a significant risk for money laundering.
This proposal comes in response to growing concerns from law enforcement and regulatory bodies about the role of crypto ATMs in fraud schemes. An internal 2023 analysis by Canada’s financial intelligence agency, FINTRAC, indicated that bitcoin ATMs are likely to continue being ‘the primary method’ used by fraudsters for gathering and laundering money obtained from victims.
In related legislative discussions, Canadian lawmakers are considering banning the use of cryptocurrencies as a means for making electoral donations due to concerns over the anonymity in fund transfers. Notably, Canada was also where the first bitcoin ATM was installed back in 2013 at a downtown Vancouver coffee shop.