Canada Proposes Nationwide Ban on Crypto ATMs, Calling Machines a “Primary Method” for Fraud

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Canada’s Liberal government has proposed banning all crypto ATMs in the country as part of a broader crackdown on fraud and money laundering. The measure, included in the Spring Economic Update released Tuesday, describes the machines as a primary tool for scammers to defraud victims and for criminals to launder cash proceeds of crime.

Government Includes the Ban in Its Spring Economic Update

The proposal appears in the fiscal update released by the Liberal government on Tuesday. Officials said the ban is intended to shut down a channel that has become central to fraud and money laundering schemes involving cryptocurrency in Canada.

“To protect Canadians by shutting down a primary method for scammers to defraud victims and for criminals to place their cash proceeds of crime,” the Canadian government said, it plans to prohibit the machines entirely.

Crypto ATMs allow users to convert physical cash into Bitcoin or other cryptocurrencies, which can then be sent to a digital wallet anywhere in the world without passing through traditional banking channels. That direct cash-to-crypto conversion, often with minimal identity verification, is what makes the machines attractive for laundering and fraud.

FINTRAC Warned in 2023 That Crypto ATMs Would Remain a Core Fraud Tool

The proposal follows years of warnings from Canadian law enforcement and regulators. A 2023 internal analysis by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Canada’s financial intelligence agency, found that Bitcoin ATMs are likely to remain the primary method fraudsters use to collect and launder funds from victims.

The finding aligns with a pattern regulators in other jurisdictions have also flagged. In the United States, the Federal Trade Commission reported a sharp rise in losses tied to crypto ATM scams. And individual states including Connecticut have taken enforcement action against operators for fee violations and compliance failures.

Canada hosts a significant number of crypto ATMs relative to its population, and the machines have been a fixture of the country’s retail crypto infrastructure since 2013, when the world’s first Bitcoin ATM was installed in a downtown Vancouver coffee shop.

The ATM Ban Joins a Separate Push to Bar Crypto From Electoral Donations in Canada

The crypto ATM proposal lands alongside other moves to tighten how cryptocurrency interacts with Canadian public life. Canadian lawmakers are separately debating a ban on crypto as a form of payment for electoral donations, citing concerns about the anonymity of fund transfers. That measure cleared a key vote last week with support from Conservative members.

Together, the two proposals signal a shift in how Ottawa views crypto’s role in the domestic economy. The country was an early adopter of crypto infrastructure and was the first to approve spot Bitcoin ETFs in 2021. The ATM ban and the donation restriction suggest the government is now drawing sharper lines around where crypto can operate without traditional compliance controls.

A Proposal, Not Yet Law

The ban is a proposal within the Spring Economic Update and has not yet been enacted. It would need to move through the legislative process before taking effect. The government did not specify a timeline for implementation or detail how existing operators would be required to wind down their machines. Canada’s crypto ATM operators have not yet issued a coordinated public response to the proposal.