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Undercover Probe Exposes Crypto-to-Cash Loopholes Enabling Anonymous Payouts in Canada

Officials pledge tougher penalties as oversight shortfalls persist.

Overview

  • A joint CBC/Radio-Canada, Toronto Star and ICIJ investigation documented cash-for-crypto deals without identity checks at both storefronts and offshore services in multiple Canadian cities.
  • In Toronto, a FINTRAC‑registered money transfer shop handed an undercover reporter US$1,900 after only matching a $5 bill’s serial number following a tether transfer.
  • Ukraine‑based 001k, which is not registered with FINTRAC, discussed delivering up to $1 million in cash in Montreal, and Chainalysis attributes about US$14.8 billion in transfers to the platform since August 2022.
  • A web directory lists more than 20 unregistered crypto-to-cash operators nationwide, and industry executive Joseph Iuso says FINTRAC lacks resources to oversee 2,600-plus registered MSBs, leaving room for foreign services to target Canadians.
  • FINTRAC says it is prepared to issue penalties and refer cases to law enforcement, and the federal government is developing a stablecoin framework as the Bank of Canada allocates $10 million over two years to support oversight.