Unregistered crypto-cash services are popping up across Canada, and they’re allowing people to move large amounts of money with almost no identity checks. This lack of oversight is creating easy pathways for money laundering and raising serious concerns about how Canada monitors digital finance.
A CBC investigation found that both small local shops and offshore platforms are offering cash-for-crypto deals with almost no compliance rules. Reporters discovered that someone can walk in, send some tether, and walk out with cash—often without showing any ID. Experts say these weak points make it far too easy for criminals to move money through the system.
Canada has already seen major problems with dirty money flowing through casinos, real estate, and the banking sector. Now, similar vulnerabilities are showing up in crypto services, where enforcement gaps allow people to sidestep rules that are supposed to protect the financial system.
Blockchain tracking can help in some cases, but once crypto is swapped for cash in these unregulated shops, most safeguards disappear.
One undercover test in Toronto showed how loose things really are. A FINTRAC-registered money transfer shop gave a reporter $1,900 in cash, asking only to check the serial number on a single $5 bill. The reporter had sent tether to “001k,” a Ukraine-based exchange that communicates through Telegram. Under Canadian anti-money-laundering laws, anything over $1,000 should trigger ID checks. That didn’t happen. The store’s manager later claimed the money came from his “own cash,” while staff said they had no idea what occurred.
In Quebec, the same investigation revealed even bigger gaps. Reporters were offered up to $1 million in cash from 001k and another service. All they had to do was send tether—no identity documents, no questions. According to Chainalysis, 001k has moved more than $14.8 billion in crypto since August 2022, yet it’s still not registered with FINTRAC.
Experts warn that services with “zero checks” essentially create unlimited opportunities for crime. Nick Smart from Crystal Intelligence pointed out that Hong Kong crypto-cash shops handled at least $2.5 billion last year, calling them ideal for criminals because nobody asks anything.
Canada’s own regulatory system is struggling. The head of the Canadian Money Services Business Association, Joseph Iuso, said FINTRAC simply doesn’t have the manpower to oversee the more than 2,600 registered money service businesses in the country.
Meanwhile, an online directory lists more than 20 unregistered crypto-cash operators from Halifax to Vancouver. Several Toronto operators openly told undercover reporters they would not ask for ID.
FINTRAC didn’t directly comment on the investigation but said it is prepared to issue penalties or work with law enforcement. The gap in enforcement remains, even though Canada recently carried out its largest crypto seizure. In September, the RCMP shut down the TradeOgre exchange and seized $56 million CAD after a year-long investigation sparked by a Europol alert.
Canada is now working on a full regulatory framework for stablecoins as part of its next federal budget. These rules will require full reserves, proper redemption procedures, and stronger risk controls. The Bank of Canada has set aside $10 million over two years to support this oversight.
Even with these challenges, crypto use in Canada is still growing. About 3% of Canadians used Bitcoin for payments in 2023, and a 2024 KPMG report showed that 39% of institutional investors in the country now hold some form of crypto—up from 31% in 2021. Canada also has more than 3,000 Bitcoin ATMs, the second-largest network in the world.
