Canada Proposes Criminal Offence for Cryptocurrency ATM Operators, April 2026

Canada's Spring Economic Update 2026, tabled on 28 April 2026 under the title "Canada Strong For All," proposes to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) to make it a criminal offence to operate a cryptocurrency automated teller machine (crypto ATM). The measure is at the pre-legislative stage, requiring Parliamentary enactment before it takes effect. The proposal also introduces new Ministerial Directive powers and expands the Financial Transactions and Reports Analysis Centre of Canada's (FINTRAC's) ability to refuse or revoke registration of money services businesses (MSBs).

The controlling legislation is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, SC 2000, c. 17, as proposed to be amended by Annex 2 of the Spring Economic Update 2026. The Annex identifies seven specific changes to the PCMLTFA: new Ministerial Directive powers; expanded FINTRAC authority to refuse or revoke MSB registration; prevention of re-registration of non-compliant MSBs; increased criminal record checks for MSBs; measures to address shelf MSBs; requirements ensuring FINTRAC has accurate understanding of MSB services; and the creation of a criminal offence for operating a crypto ATM without authorisation.

Crypto ATM operators currently registered as MSBs under the PCMLTFA face the prospect of criminal liability if the proposal passes. Any operator conducting crypto ATM transactions in Canada without a valid registration — or after registration is refused or revoked under the expanded FINTRAC powers — would face criminal prosecution rather than current administrative penalties. MSBs providing cryptocurrency exchange services must also prepare for stricter criminal-record screening of their principals.

The proposed measures are legislative, not regulatory: they require a bill to pass both Houses of Parliament and receive Royal Assent before taking legal effect. No timeline for enactment is specified in the Spring Economic Update. Existing crypto ATM operators registered as MSBs retain their current legal status until any amendment to the PCMLTFA comes into force. No grandfathering or transitional provisions have been announced.

Our firm advises on Canadian AML/CTF compliance, MSB registration, crypto ATM regulatory requirements, and PCMLTFA obligations. We maintain a dedicated partner network with counsel across Canadian provinces and invite contact to discuss how these proposals affect your operations. Our work includes AML/CTF compliance, PCMLTFA registration, crypto ATM regulation, FINTRAC compliance, money services businesses, cryptocurrency exchange licensing, and financial crime risk management.

Source: Canada Spring Economic Update 2026, Annex 2: Legislative Measures, tabled 28 April 2026, https://budget.canada.ca/update-miseajour/2026/report-rapport/anx2-en.html; confirmed 4 May 2026.

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