Canada Moves to Ban Crypto ATMs to Combat Fraud

• Canada plans to ban crypto ATMs after regulators link them to rising fraud cases.
• FINTRAC identifies crypto ATMs as a key channel used in scam-related transactions.
• Bill C-25 advances to restrict crypto donations in federal political campaigns.

Canada is moving toward stricter controls on crypto access points and political use cases, as federal authorities outline plans to ban crypto ATMs and limit digital asset donations in elections. The measures, detailed in the Spring Economic Update 2026 and ongoing legislative activity, correspond to a broader shift toward tightening oversight where regulators have identified fraud and transparency risks.

Officials have pointed to crypto ATMs as a key channel for scams, while lawmakers are advancing proposals to restrict the use of digital assets in political financing.

Canada Targets Crypto ATMs Over Fraud Concerns

According to a CBC News report, the federal government has proposed a nationwide ban on cryptocurrency ATMs, describing them as a primary method scammers use to defraud victims and process illicit funds. The country currently hosts nearly 4,000 machines, the highest number per capita globally.

Investigations cited in the report found that these machines have become a central tool for fraud schemes. FINTRAC reached a similar conclusion in a February 2023 analysis based on suspicious transaction reports. The agency identified crypto ATMs as a recurring channel through which victims transfer funds under fraudulent instructions.

Crypto ATMs allow users to convert cash into digital assets without requiring a bank account. Transactions under $1,000 often need only a phone number, and transfers are completed quickly with limited identity checks.

Unlike traditional banking systems, there is no in-person oversight to detect potential fraud during transactions. While the machines are currently regulated as money services businesses, Canada lacks industry-specific rules governing their operation.

Lawmakers Advance Crypto Donation Restrictions

Separately, Canada has taken measures to restrict the use of cryptocurrency in federal elections. Lawmakers recently advanced Bill C-25, known as the Strong and Free Elections Act, through second reading in the House of Commons.

The proposed legislation would prohibit political parties, candidates, and affiliated groups from accepting crypto donations. The restriction extends to leadership campaigns, nomination contests, riding associations, and third-party advertisers. Entities receiving prohibited contributions would be required to return the funds or transfer them to the Receiver General within 30 days.

Support for the bill has come from multiple political parties, pointing to broad agreement on the need for tighter controls. Lawmakers have linked the proposal to challenges in verifying donor identities and tracing the origin of funds when digital assets are used.

Related: Canada Intensifies Fight Against Money Laundering with Stricter Enforcement