Canada is moving to beef up its fight against financial crime — and the changes could have big implications for the crypto sector.
This week a Liberal government bill completed its first reading in Parliament to create a new Financial Crimes Agency (FCA), an empowered federal law‑enforcement body charged with investigating and prosecuting complex financial offences. Backed by the Liberals’ parliamentary majority, the legislation is expected to progress quickly.
Why the push? A public inquiry concluded Canada lacked a unified strategy against money laundering and lagged international peers. For 25 years FINTRAC, the financial transactions and reports analysis centre, has served as Canada’s financial intelligence unit. Last year FINTRAC flagged roughly $45 billion in suspicious transactions through disclosures related to money laundering, terrorist financing, sanctions evasion and related activity — a figure experts say only hints at the problem’s true scale.
“Seeing the creation [of a] new enforcement agency is a meaningful investment and hopefully signals the understanding of the seriousness of the challenge,” said Jessica Davis, a former intelligence analyst with Canada’s spy agency who now runs Insight Threat Intelligence. Unlike FINTRAC — which produces intelligence and hands cases to police and prosecutors — the new FCA would have the authority to both investigate and bring prosecutions. That change will narrow FINTRAC’s remit and reduce the role of the RCMP in financial‑crime work.
Adopting a prosecutorial mandate reflects concerns that Canada’s current enforcement apparatus has struggled to sustain complex financial investigations. “The RCMP has been unable and unwilling to actually investigate and sustain investigations related to financial crimes,” Davis said, pointing to gaps in funding, skills and political will. Financial‑crime probes are long and resource‑intensive; the FCA is intended to provide a sustained, specialist response.
Crypto measures and industry impacts
As part of the package, the government will ban cryptocurrency ATMs — a controversial move aimed at stopping their use by scammers and as a means to launder illicit funds. Canada currently hosts nearly 4,000 crypto ATMs, the highest per capita anywhere in the world. For crypto businesses and users, the ban signals a tougher stance on flows that regulators say have been exploited by criminals.
A wider context: global and US contrasts
The reforms arrive amid starkly different signals south of the border. A 2024 global estimate put more than US$3 trillion in illicit funds moving through the world financial system in a single year, with large components tied to human and drug trafficking and terrorist financing. A US Treasury report described the domestic impact as “devastating.”
But recent moves by the US administration have drawn criticism from Democrats who say enforcement is being deprioritised. The article notes the Trump administration issued a high‑profile pardon for Changpeng Zhao after he pleaded guilty to money‑laundering charges; Binance was also ordered to pay a record US$4.3 billion penalty for facilitation of illicit transfers. Senior Democrats have urged watchdogs to probe decisions that shifted more than 25,000 personnel away from fraud, tax‑evasion and money‑laundering investigations to focus on immigration enforcement. “The Trump administration is letting white‑collar criminals off the hook,” Senator Elizabeth Warren said, accusing the administration of diverting resources from consumer protections.
“Canada and the US are diverging,” Davis observed, while noting the US remains “far ahead of us in terms of its ability to prosecute and invest, investigate and prosecute” financial crimes. She framed Canada’s initiative as an attempt to shore up domestic capabilities and build a bulwark against spillover effects from US policy choices.
Reactions and open questions
Anti‑corruption groups welcomed the move. Salvator Cusimano, executive director of Transparency International Canada, called the proposed mandate “ambitious but realistic” and urged close coordination between the new agency and other federal and provincial regulators to make it effective.
Practical questions remain: how will the FCA work alongside the RCMP, where will it be headquartered, and how will it be staffed without stripping resources from existing units? Davis stressed the need for sustained political commitment: “This is a massive and necessary investment for Canada. But we’ll also have to keep pressuring the government to continue to fund it, continue to prioritise it, to actually get some of those outcomes that we’re looking for.”
For the crypto industry, the FCA and the crypto ATM ban signal a renewed, enforcement‑first approach in Canada. That may mean tougher compliance expectations and faster regulatory action against platforms and services that enable illicit flows — a trend that crypto firms and users will need to watch closely as the bill moves through Parliament.
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