The federal government announced it’s planning to ban crypto ATMs in order to protect Canadians from scammers using the machines to defraud victims.
The Liberals’ spring economic update on Tuesday referred to crypto ATMs as a “primary method for scammers to defraud victims and for criminals to place their cash proceeds of crime.”
Crypto ATMs might look a lot like a traditional banking machine, but instead of dispensing cash from your bank account, the majority of these machines allow customers to deposit cash and then convert it into cryptocurrency, like Bitcoin. Then, they can send it to a virtual wallet anywhere in the world.
The investigation revealed that these machines, which currently operate legally in Canada, have become the main vehicle fraudsters use to get money from scam victims across the country. Canada’s financial intelligence agency, FINTRAC, came to that conclusion in a February 2023 analysis of suspicious transaction reports submitted to the agency.
Crypto ATMs are touted as a low-barrier, convenient way to buy or sell crypto, but that’s also what makes them appealing to fraudsters.
Funds are sent quickly, a bank account isn’t required, most transactions only require a phone number if depositing under $1,000 and, unlike a bank, there’s no human interaction or teller trained to recognize a fraud unfolding.