A sprawling network of unregistered cryptocurrency-to-cash services is operating across Canada, allowing individuals to convert millions of dollars with virtually no identity verification, according to a joint investigation by CBC News, Radio-Canada, Toronto Star and La Presse published Monday.
The investigation found that both street-level money transfer shops and offshore digital platforms are facilitating high-value cash-for-crypto exchanges outside Canada's anti-money laundering framework, creating what experts describe as unlimited opportunities for criminal finance.
In one undercover test in Toronto, a reporter walked into a FINTRAC-registered money transfer business and collected $1,900 in cash after only verifying a $5 bill's serial number. The reporter had transferred tether cryptocurrency to 001k, a Ukraine-based exchange accessible through Telegram. Under Canadian law, any transfer exceeding $1,000 requires collecting recipient information. The store failed to do so.
When questioned, a manager claimed he had used his own cash, stating it was "earned legally," while counter staff said they had no knowledge of the transaction. The business remains registered with the Financial Transactions and Reports Analysis Centre of Canada, the country's financial intelligence agency tasked with enforcing anti-money laundering compliance.
Million-Dollar Cash Offers Without Verification
The scope of unchecked transactions extends far beyond Toronto. In Quebec, journalists received offers from 001k and another service to deliver up to $1 million in cash to Montreal locations in exchange for tether transfers. No identity documents were requested.
Data from blockchain analytics firm Chainalysis shows 001k has handled more than $14.8 billion in cryptocurrency transfers since August 2022. The platform operates without FINTRAC registration in Canada.
"Services with absolutely zero checks create an environment where unlimited crime is possible," said Richard Sanders, an investigator who tracks crypto-to-cash networks, in the CBC report.
Nick Smart from Crystal Intelligence told investigators that Hong Kong's crypto-to-cash businesses processed at least $2.5 billion last year, describing them as "a perfect place to operate as a criminal because no one's going to ask any questions."
Enforcement Capacity Falls Short
Canada's struggle with illicit money flows is well-documented across traditional sectors including casinos, real estate and banking. The emergence of crypto-to-cash services has opened new channels that exploit the same regulatory weaknesses, experts say.
Joseph Iuso, executive director of the Canadian Money Services Business Association, told CBC that FINTRAC lacks the capacity to fully monitor all 2,600-plus registered money service businesses operating in the country. The gap between registration requirements and effective oversight creates space for both registered businesses to violate rules and unregistered operators to function openly.
One online directory lists more than 20 unregistered crypto-to-cash operators from Halifax to Vancouver. Several Toronto-based operators told undercover reporters they would not request identification for large transactions.
FINTRAC declined to comment directly on the investigation but said it is "prepared to take strong action as necessary" through administrative monetary penalties and referrals to law enforcement. The agency has demonstrated willingness to issue significant fines. In October, it imposed a record $177 million penalty on crypto platform Cryptomus for failing to report over 1,000 suspicious transactions linked to darknet markets, child exploitation material and sanctions evasion.
Historic Seizure Marks Enforcement Milestone
The enforcement gap persists despite recent high-profile action. In September, the Royal Canadian Mounted Police executed Canada's largest cryptocurrency seizure, recovering $56 million from the TradeOgre exchange and dismantling the platform entirely.
The year-long investigation began after a tip from Europol in June 2024. Investigators found TradeOgre failed to register with FINTRAC and did not verify client identities. Police stated they believe the majority of funds transacted on the platform came from criminal sources.
The case marked the first time Canadian law enforcement dismantled a cryptocurrency exchange platform. Authorities seized computer infrastructure in Beauharnois, Quebec, that allegedly facilitated the trading. The investigation involved the RCMP's Money Laundering Investigative Team using blockchain analytics to trace illicit flows between TradeOgre and darknet markets, ransomware programs and fraud schemes.
New Stablecoin Framework Coming
Canada is moving to address regulatory gaps through new legislation. The 2025 federal budget announced in November includes plans for comprehensive stablecoin regulation, positioning fiat-backed stablecoins as payment instruments rather than securities.
The framework will require stablecoin issuers to maintain full reserves, establish clear redemption policies and implement risk management systems including safeguards for personal and financial data. The Bank of Canada will allocate $10 million over two years starting in 2026-2027 to oversee implementation, with subsequent annual supervision costs of about $5 million to be recovered from regulated issuers.
The move comes months after the United States passed the GENIUS Act in July, establishing the first federal framework for payment stablecoins. Canada's legislation follows similar approaches taken by the European Union through its Markets in Crypto-Assets regulation and the United Kingdom's forthcoming framework expected in 2026.
"For years, the crypto sector has been asking for clear, proportionate and prudential rules around stablecoins," Eric Richmond, general counsel at Canadian crypto trading platform Shakepay, said following the budget announcement. "This framework is a huge step toward giving us clarity."
Final thoughts
Cryptocurrency adoption remains significant in Canada despite ongoing regulatory challenges. Data shows 3% of Canadians used Bitcoin for payments in 2023. Institutional interest has grown substantially, with a 2024 KPMG survey finding that 39% of Canadian institutional investors held crypto exposure, up from 31% in 2021.
The country hosts more than 3,000 Bitcoin ATMs, the second-largest network globally. While these machines operate legally and must comply with FINTRAC reporting requirements, a separate CBC investigation published in October found they have become the primary method fraudsters use to obtain money from scam victims. Fraud victims reported losing $14.2 million through crypto ATMs in 2024, with losses on pace to exceed that figure in 2025.
The challenge for Canadian authorities lies in balancing legitimate cryptocurrency innovation with effective enforcement against illicit finance. While blockchain technology enables transaction tracking, crypto-to-cash services strip away controls at the critical points where digital assets enter or exit the traditional financial system.
The latest investigation reveals those entry and exit points remain dangerously porous across the country, allowing anyone with an internet connection to move substantial sums with minimal scrutiny.