The federal government announced it plans to ban crypto ATMs to protect Canadians from scammers.
While these ATMs look like normal ones, crypto ATMs allow users to deposit cash and convert it into cryptocurrency, like Bitcoin or Solana, which can then be transferred to a crypto wallet and accessed from anywhere.
Canada has over 4,000 of these ATMs, the highest number in the world and just over 10 per cent of the 39,000 crypto ATMs worldwide. CBC News investigated these machines last year on its Feeding Fraud: The Crypto ATM Problem series. That investigation unveiled that these ATMs, while perfectly legal, were the main way fraudsters could get money from scam victims.
Using the ATMs is easy, which makes them the perfect tool to steal from people who don’t know any better. To make a deposit, all that anyone needs is a phone number, unless depositing over $1,000. For deposits less than $1,000, no bank account is required and no human is there to supervise transactions or catch fraudulent actions.
Canada’s Spring Economic Update, released earlier this week, outlines the current plan to prevent these scams:
- “Introducing new Ministerial Directive powers to safeguard national security and the integrity of the financial system;
- “Expanding Financial Transactions and Reports Analysis Centre of Canada’s (FINTRAC) ability to refuse or revoke registration of MSBs;
- “Preventing the re-registration of non-compliant MSBs;
- “Increasing the number of criminal record checks for MSBs; and
- “Enhancing FINTRAC’s understanding of MSB risks by ensuring it has accurate and up-to-date information regarding the commencement of business and services provided by MSBs.”
“These measures will ensure Canadians can still benefit from the services offered by money service businesses (MSBs), including buying virtual currencies from brick-and-mortar MSBs, while better protecting MSBs from illicit activity,” reads the economic update.
Whether these actions help to mitigate or even stop scams that utilize these ATMs remains to be seen, but the government’s acknowledgement and recognition of needing better safeguards will hopefully lead to less people being scammed out of their money.
Header image credit: Shutterstock
Sources: CBC, Government of Canada
