Canada’s New Financial Crime Bill to Target Crypto ATMs and Abuse of MSBs

Canada has introduced legislation to strengthen oversight of money services businesses (MSBs) and make it a criminal offense to operate crypto ATMs without provincial or territorial MSB licensing.

Bill S-8, the Combatting Financial Crimes and Drug Trafficking Act, was introduced on November 3. It would expand the powers of FINTRAC, Canada’s financial intelligence unit, to refuse or revoke MSB registrations and introduce new ministerial powers to address national security risks.

Criminal record checks would extend to MSB owners or investors holding at least a 5% stake, compared with the current 20% threshold.

Under the proposed crypto ATM rules, the ban on unlicensed machines would take effect 18 months after Royal Assent, giving provinces and territories time to establish licensing regimes.

The government previously outlined plans to ban crypto ATMs in its Spring Economic Update 2026. Licensed and regulated machines could continue operating under the new proposals, subject to enhanced federal requirements that would take effect in stages 90 and 180 days after Royal Assent.

The bill would also restrict cash transactions of C$10,000 or more and third-party cash deposits, a method criminals use to move illicit funds through other people’s accounts. Banks and credit unions would be exempt from the restriction on large cash transactions.

The legislation would also clarify how regulated businesses can receive and use law enforcement information for anti-money laundering purposes.