Canada has taken strong action against cryptocurrency businesses by removing the registrations of nearly three dozen firms. These companies were previously allowed to operate as money service businesses, meaning they could legally handle and process crypto transactions.
The move was carried out by the country’s financial intelligence agency, FINTRAC, which monitors financial activity and works to prevent illegal money flows. In one week, 23 crypto firms were removed from the official registry. Earlier in the same month, about 12 more companies had already lost their registrations.
This marks a noticeable increase in enforcement. Authorities are now paying closer attention to cryptocurrency businesses, especially those involved in money transfers and cash exchanges.
The action followed an investigation led by International Consortium of Investigative Journalists and Toronto Star. The investigation found that many crypto services were operating without proper registration, which is required under Canadian law.
Investigation Reveals Unlawful Crypto Operations
The investigation showed that many crypto businesses were operating in a single area, offering services that may not follow legal rules. A large number of these businesses focused on converting cryptocurrency into physical cash.
OFAC lists 21 crypto wallets linked to North Korea IT worker network generating $800 million
This type of service can be risky if not properly regulated. It can allow money to move without being tracked. In several cases, businesses did not ask for proper identification from customers, which goes against anti-money laundering laws.
One example showed how a transaction was completed without proper ID checks. Instead of asking for a name or official document, the service used a different method. A customer was asked to take a photo of a banknote’s serial number and present the same note during the cash exchange. This was used as proof of identity. The transaction involved a platform called 001k.
Experts shared with CBC and La Presse believe such methods likely break financial rules.
The investigation also found large amounts of money moving through certain crypto wallets. One wallet handled more than $120 million in transactions over a year. Two transactions worth about $430,000 were linked to accounts allegedly connected to the Islamic Revolutionary Guard Corps, which is designated as a terrorist organization by Canada.
These findings raised concerns about how crypto platforms can be misused when proper checks are not followed.
Crypto exchange Binance sues Wall Street Journal after report on alleged Iran-linked transactions
Growing Concerns Over Money Laundering and Weak Oversight
The main concern is money laundering, where illegal money is made to appear legal. Cryptocurrency can sometimes make this easier because transactions can happen quickly and without strong identity checks.
Experts say the recent actions show that authorities want to send a clear message. They want businesses to follow rules and ensure proper checks are in place. A former official, Denis Meunier, noted that the agency appears to be signaling that it is closely watching the sector.
However, concerns remain about the speed of enforcement. Some firms that lost registrations had already expired earlier, raising questions about delays.
There has also been criticism in the past that too many businesses were allowed to register without strict checks. The recent removals suggest a shift toward stronger monitoring. Industry representatives, including Joseph Iuso, have indicated that authorities are now more active in reviewing and publicizing their actions.
Statements from François-Philippe Champagne have reinforced that efforts are continuing to address risks linked to virtual currency businesses.
The investigation also highlighted how services converting crypto into cash can avoid standard safeguards, making it harder to track illegal activity. It further showed links between some transactions and broader global concerns.
Authorities have indicated that additional actions may follow, but no specific details have been shared.