Canada targets registered crypto MSBs as unlicensed shops keep handling illicit funds
Canada’s anti-money laundering watchdog has yanked nearly three dozen crypto firms off its registry in just days, but experts warn the crackdown may do little to stop unlawful operators still moving money in the shadows.
According to the Toronto Star, the Financial Transactions and Reports Analysis Centre (Fintrac) revoked the registrations of 23 cryptocurrency money services businesses on Tuesday, after pulling another 12 crypto firms earlier in March.
The Star reported that Fintrac has revoked 269 money services business registrations over the past five years, and more than 10 percent of those came in a 10‑day stretch this month.
Finance Minister François‑Philippe Champagne called this “a significantly increased pace of action” and said the government will maintain that momentum.
ACAMS reported that all 23 businesses named on Tuesday offer cryptocurrency-related services.
It noted that Fintrac can revoke a firm’s registration if its owner or operator is convicted of certain crimes, does not respond to information requests or fails to keep basic information, such as a name or address, up to date.
ACAMS also said two of the 23, Finax in Bratislava, Slovakia, and Commerce Plex in Luton, England, have no physical location in Canada and also provide currency-exchange and money-transfer services.
According to the Toronto Star, the enforcement sweep stems from a months-long investigation it conducted with the International Consortium of Investigative Journalists.
The probe uncovered a surge in unlawful crypto companies in Canada that can move illicit money while dodging law enforcement and regulators.
The investigation identified 50 businesses advertising crypto services in clusters along Yonge Street, from Toronto’s Little Iran neighbourhood up to Richmond Hill and beyond, and found that 70 percent were operating unlawfully.
As reported by the Toronto Star, one of the firms examined in that joint investigation, Richmond Hill‑based Danesh Exchange, had its registration revoked this month.
Danesh registered with Fintrac in 2021 and was authorized to handle virtual currency and foreign money exchange services.
A Danesh staff member confirmed by phone that Fintrac had pulled the company’s registration but did not answer detailed questions before publication.
The Star also noted that once Fintrac revokes a company’s registration, it can no longer legally operate.
Industry and former regulatory officials questioned how much the revocations address the risks highlighted by the investigation.
Cryptocurrency investigator Richard Sanders told the Toronto Star, “If Fintrac is going to tout this as doing something, it isn’t,” saying many exchanges the Star found operating unlawfully appear still to be in business.
Former Fintrac deputy director Denis Meunier told the Star the agency seems to be trying to send a message that “Fintrac is watching,” but he pointed out that two businesses on the list already had registrations that expired in 2024 and said, “I think they need to be quicker on the draw.”
According to the Toronto Star, a Fintrac spokesperson said a business generally remains registered even after its registration has expired if the agency is still reviewing its renewal application.
The Star reported that money services businesses, including crypto-for-cash shops, must register with Fintrac to curb money laundering and terrorist financing. But the Star/ICIJ investigation still found dozens of GTA crypto firms handling virtual currencies without being registered.
The Toronto Star reported that Joseph Iuso, executive director of the Canadian Money Services Business Association, said Fintrac now appears more willing to use — and publicize — its power to revoke registrations.
“They’ve been criticized that they don’t have teeth, letting all these people register without checking. So I think they’re trying to show that, ‘Hey, we are checking and we do have teeth,’” he told the Star.
Fintrac spokesperson Mélanie Goulette Nadon said the agency has been “consistent in its forceful approach” and has “proactively” informed Canadians about enforcement actions since 2022, according to the Toronto Star.
She said more crypto enforcement is coming but that Fintrac “is prohibited from disclosing information” about compliance actions involving specific firms.
Champagne also said the government will “continue to monitor and pursue new measures to address risks posed by virtual currency businesses, such as cryptocurrency MSBs and crypto ATMs, which can be used to facilitate money laundering and fraud.”
