A regular ATM and a Bitcoin ATM at a convenience store in downtown Toronto, May, 2024.Abhijit Alka Anil/The Globe and Mail
The federal government’s pledge to shut down nearly 4,000 crypto ATMs is getting praise from groups working to combat fraud but generating strong pushback from the cryptocurrency industry.
Canada would become the latest country, behind New Zealand, Singapore and Britain, to place a ban on cryptocurrency ATMs in an effort to tackle the criminal use of money service businesses for scams and illicit fund transfers.
Ottawa’s spring fiscal update in late April signalled its intention to bring in legislation to ban crypto ATMs. Canada has seen rising cases of cryptocurrency fraud, according to the Canadian Anti-Fraud Centre.
The update said these machines are a primary method used by scammers to defraud victims, as criminals often use them to launder money, instantly transferring funds between wallets.
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The legislation, when passed, would make it a criminal offence to operate a crypto ATM.
Crypto ATMs, also known as Bitcoin ATMs, are physical kiosks found in convenience stores or gas stations. They allow for the purchase of cryptocurrency with cash. These machines operate independently – unlike traditional banking machines that flow money to and from a bank account.
Fraudsters often target older adults by posing as bank employees, police officers or government officials and falsely claiming the target’s money is at risk, directing them to withdraw cash and deposit it into a crypto ATM to protect their funds.
While crypto transactions can be traced, money can be sent across borders, making tracking and recovering funds more challenging.
Fraudsters have also found ways to get their victims to deposit cash into anonymous or pseudonymous crypto wallets, said Jessica Davis, president of the consultancy Insight Threat Intelligence. She is also president of the Canadian Association for Security and Intelligence Studies.
“It makes it really difficult for the police to recover those proceeds of crime as well. Because once they’re in the crypto ecosystem, maybe they can be traced, but the international nature of it makes asset recovery pretty close to impossible,” she said in an interview.
Australia has also taken steps toward regulating these machines. It sets a limit of 5,000 Australian dollars on transactions, while Britain, Singapore and New Zealand effectively banned crypto ATMs.
Ms. Davis, who spent almost two decades working within government agencies, including the Canadian Security Intelligence Service and the Financial Transactions and Reports Analysis Centre of Canada, said a full ban on the ATMs would eliminate a lot of the ways illicit actors get around traditional safeguards.
“If you have a $5,000 daily limit, if you are somebody who’s – for instance – dealing drugs, all you need to do is find three or four friends, and you can deposit $20,000 into cryptocurrency,” she said.
“The problem is there’s a lot of ways around it. So, if you don’t have the ATMs at all, it really eliminates those kinds of possibilities.”
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But for Ben Weiss, the proposed ban came as a shock. Mr. Weiss is co-founder and chief executive officer of CoinFlip, a crypto kiosk operator with more than 5,000 machines across 10 countries. CoinFlip proactively reached out to Ottawa a couple of months ago, he said, but did not hear back about any specific issues or shortcomings with their machines.
“We want to stop fraud,” he said.
CoinFlip reports suspicious transactions to FinTRAC, he added, and is under the same federal anti-money laundering rules that banks operate under.
“The government should at least consult with the industry, and if they’re seeing issues, give the industry a chance to be part of the solution,” he said.
“We have not been given any opportunity as a stakeholder to provide our expertise at stopping fraud and stopping money laundering.”
Ottawa’s announcement in the fiscal update drew similar concern from other cryptocurrency companies.
Localcoin, Canada’s largest crypto ATM operator, expressed concern in a press release last week.
“It was developed without prior notice to stakeholders, and no one in the industry was aware it was under consideration,” said chief executive Tristan Fong.
He added that fraud is a broader challenge within the financial system, and that eliminating one access point – like these ATMs – would not stop criminal activity.
“We are ready to work collaboratively with policymakers to strengthen regulation, enhance fraud prevention measures, and improve public education across crypto ATM networks,” Mr. Fong added, echoing sentiments from Mr. Weiss.
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According to Coin ATM Radar, a site designed to locate crypto ATMs worldwide, Canada has the second-highest number of crypto ATMs in the world, with nearly 4,000 across the country.
In 2025, the Canadian Anti-Fraud Centre documented just over $177.5-million in reported losses from cryptocurrency-related payment methods. Cryptocurrency is being leveraged by fraudsters as it becomes difficult to trace or recover funds once they are sent, it added.
While these numbers are not specifically linked with crypto ATMs, based on reporting trends, the centre believes a significant portion of these reports represent crypto ATM fraud, it said in an e-mailed statement.
The Canadian Association of Retired Persons welcomed the proposed legislation, writing in a news release that it had been calling for a measure to be put in place, and raised its concerns to the Department of Finance. Crypto ATMs have been used at staggering rates, the association wrote, and are increasingly used to target Canadians, but especially older adults.
The perceived benefit of these machines, it added, does not outweigh the risks.