Canada Moves to Ban Crypto ATMs Over Fraud and Money Laundering

Canada's federal government proposed banning all crypto ATMs on April 28, 2026. The measure appeared in Ottawa's Spring Economic Update. Officials cited the machines as a top channel for fraud and money laundering.

The proposal is blunt. The government says crypto ATMs are a "primary method for scammers to defraud victims and for criminals to place their cash proceeds of crime." Canadians can still buy Bitcoin through licensed brick-and-mortar money services businesses. The ban targets the kiosks specifically.

The irony is hard to miss. Canada is the birthplace of the Bitcoin ATM. The world's first publicly available Bitcoin ATM went live in a Vancouver coffee shop in 2013. Now, 13 years later, the same country wants them gone entirely.

How Canada Got Here

Canada currently operates approximately 4,000 crypto ATMs, giving it one of the densest concentrations of such machines per capita worldwide. According to Coin ATM Radar data, Canada accounts for roughly 10% of global crypto ATMs, second only to the United States.

That density created exposure. As the number of machines grew, so did the fraud. Canada's financial intelligence agency, FINTRAC, concluded in a February 2023 internal analysis that bitcoin ATMs would remain the "primary method" domestic and international criminal fraudsters use to collect and launder funds from victims. That report sat largely without public action for two years.

Despite those findings, FINTRAC was not tracking which companies operated these machines, how many there were, or where they were located in Canada.

The Fraud Numbers

Canadian Anti-Fraud Centre data shows fraud victims reported losing $14.2 million to scams through crypto ATMs in 2024. In just the first three months of 2025, losses already reached $4.2 million, putting the year on pace to surpass 2024.

Those figures are almost certainly a fraction of reality. CAFC estimates that only five to ten percent of fraud incidents are reported to it at all, and its statistics do not include most police reports. Toronto police financial crimes detective David Coffey put it plainly, saying those numbers need to be multiplied by 10 to 20 to approximate real damages.

The scam patterns are consistent. Law enforcement says victims are typically told to deposit cash into a kiosk under the pretense of paying a tax debt, securing a romance, or recovering a hacked account. Once the cash enters the machine, recovery is near impossible.

What the Ban Does and Does Not Do

The proposal bans the standalone kiosks. It does not ban Bitcoin or crypto ownership. Canadians will retain the ability to buy and sell digital assets through licensed physical businesses and regulated online platforms.

For operators, the threat is existential. Bitcoin Well and Localcoin, two major Canadian crypto ATM companies, collectively run hundreds of machines. Neither faces immediate shutdown — the Spring Economic Update provided no implementation timeline or phase-out details.

There is a genuine cost to the ban. Some Canadians who rely on cash-to-crypto services have few alternatives, since many domestic banks already restrict or block transfers to crypto exchanges. For unbanked or cash-dependent users, the ATMs were a practical access point.

Canada Is Not Acting Alone

The proposal fits a pattern across several countries. The UK effectively restricted crypto ATMs in 2021 by requiring all operators to register with the Financial Conduct Authority. As of 2026, no operator has obtained that registration, making each machine in practice illegal. New Zealand has introduced legislation for an outright ban. Australia's financial intelligence agency imposed per-transaction cash limits in mid-2025.

In the United States, the FBI documented 13,460 crypto ATM-related fraud complaints in 2025, totaling $389 million in victim losses — a 58% increase year over year. Around half of US states have proposed or passed targeted restrictions, though a federal ban has not advanced.

Broader Canadian Regulatory Context

The ATM ban is one piece of a larger push. The same Spring Economic Update establishes a new Financial Crimes Agency and gives FINTRAC expanded tools to refuse or revoke registrations for non-compliant money services businesses, including crypto companies.

Ottawa also enacted a federal stablecoin framework in Bill C-15, making the Bank of Canada the supervisor and requiring fiat-referenced issuers to register, maintain full reserve backing, and redeem at par, with most rules expected to take effect after a 2027 regulatory finalization date.

Lawmakers are also advancing Bill C-25 to bar cryptocurrency donations in federal politics over concerns about traceability and foreign interference.

The direction is clear. Canada is not turning against Bitcoin. It is drawing hard lines around the cash-to-crypto channels it believes are most exposed to abuse, while pulling the rest of the digital asset sector under formal federal oversight.