On November 3, the Government of Canada introduced Bill S-8, the Combatting Financial Crimes and Drug Trafficking Act. The bill proposes to fight financial crimes through five different measures:
- Addressing criminal abuse of money services businesses
- Cracking down on unlawful crypto ATMs
- Addressing some of the most common forms of money laundering
- Cracking down on the unlawful use of the mail system
- Clarifying public to private information sharing
Money services businesses (MSBs) are an important source of competition and financial inclusion, providing services such as remittances, currency exchange, and digital payments to consumers across Canada.
Canada's 2025 National Risk Assessment finds that MSBs are highly vulnerable to money laundering and terrorist financing and criminals are increasingly abusing MSBs to launder money, finance terrorism, evade sanctions, and defraud Canadians of their hard-earned savings. MSBs are also vulnerable to hostile foreign actors who seek to undermine Canada's national security. These actors may attempt to exploit MSBs by accessing sensitive personal and financial information or by leveraging remittance channels to facilitate foreign interference, cybercrime, and other illicit activities.
Bill S-8 proposes amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its regulations to address the criminal abuse of money services business by:
- Introducing new Ministerial powers to safeguard national security and the integrity of the financial system, including the ability to direct the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to deny or revoke MSB registration. MSBs will also be ineligible for registration under the PCMLTFA if their registration as a payment service provider (PSP) is refused or revoked under the Retail Payment Activities Act (RPAA) for national security reasons. This is meant to promote consistency between the two Acts, where MSBs are also PSPs.
- Expanding Ministerial powers to temporarily suspend the registration of all MSBs or certain classes of MSBs. It would also enable the issuance of directives requiring enhanced due diligence for, and the issuance of regulations to temporarily limit or prohibit, certain domestic transactions in prescribed circumstances. These measures can already be applied to transactions going to or coming from a foreign country.
- Preventing the registration and re-registration of non-compliant and criminal MSBs by expanding FINTRAC's ability to refuse or revoke registration.
- Increasing the number of criminal record checks for owners or investors in an MSB by raising the threshold for criminal record checks from 20 per cent ownership to five.
- Enhancing FINTRAC's understanding of MSB risks by ensuring it has accurate and up-to-date information regarding the commencement of business, financial information, and services provided by MSBs.
Following these changes, Canadians would still be able to benefit from the full services provided by MSBs.
Cracking Down on Unlawful Crypto ATMs
Crypto ATMs have become a primary method for scammers to extract cash from victims and for criminals to place their cash proceeds of crime in Canada. Crypto ATMs are also used to evade sanctions and fund terrorism.
Studies have found that between 85 and 98 per cent of crypto ATM transactions are linked to illicit activity. The Canadian Anti-Fraud Centre conservatively estimates that between five and 10 per cent of fraud is reported, meaning that Canadians are estimated to have lost between $142 million and $284 million due to fraud facilitated by crypto ATMs in 2024.
Bill S-8 proposes amendments to the PCMLTFA and its regulations to protect Canadians from fraud and other financial crimes by making it a criminal offence to operate a crypto ATM that is not licensed as a money service business in a province or territory. The bill also proposes enhanced federal regulatory requirements for ATMs that are not subject to the ban that reflect the highest regulatory standards that currently exist internationally.
The regulatory amendments would come into force 90 to 180 days following Royal Assent to allow time for implementation. The ban for unlicensed crypto ATMs would come into force 18 months following Royal Assent to allow provinces and territories without a licensing regime to implement one.
Canadians can continue to use licensed and regulated crypto ATMs as well as in-person and online regulated platforms for cryptocurrency.
Addressing Some of the Most Common Forms of Money Laundering
Profit-driven crimes such as drug trafficking, extortion, and fraud generate cash proceeds and cash remains a preferred payment method for criminals as it is autonomous and easily transferrable. For this reason, many countries maintain restrictions on large cash transactions and Canada is the only G7 country, other than Japan, without a framework to restrict or regulate large cash transactions across the economy.
Organized crime groups also rely on "money mules" to place cash in multiple accounts at numerous financial institutions, often by depositing small amounts to avoid detection and mandatory reporting.
- Bill S-8 proposes amendments to the PCMLTFA and its regulations to protect businesses from criminal abuse by addressing some of the most common forms of money laundering through restrictions on large cash transactions of $10,000 or more and the depositing of cash by one person to another person's account (i.e., third-party cash deposits).
The impact of these measures on Canadians would be minimal. Cash represented only one per cent of payment transaction value in Canada in 2025, with an average transaction value of only $24. Deposit taking institutions, such as banks and credit unions, are exempted from the restriction on large cash transactions to allow cash to flow to the financial system and enable convenient, secure, and cost-effective electronic payment alternatives for large purchases, such as cheque, debit card, credit card, wire-transfer, e-transfer, etc.
Every person in Canada has a statutory right to a bank account and Canada has the highest rate of financial inclusion in the G7, with over 99 per cent of working age Canadians having an account at a financial institution.
Cracking Down on the Unlawful Use of the Mail System
Organized crime groups and other criminal actors are using the mail system to transport contraband, including potent illegal drugs like fentanyl, counterfeit currency, stolen goods, and child sexual abuse and exploitation material. Right now, law enforcement are limited in their ability to search and seize mail in transit, even when they have sufficient evidence to obtain a warrant.
- Bill S-8 would amend the Canada Post Corporation Act to allow law enforcement to search and seize mail if they have lawful authority under the Criminal Code, the Controlled Drugs and Substances Act, or the Cannabis Act. Postal Inspection authorities would remain unchanged and would continue to apply only to inspecting parcels for non-mailable matter. Unlike Bill C-2, these amendments would not allow postal inspectors to open letters.
- Under the Cannabis Act, these authorities would apply in cases involving suspected non-compliance with the legal framework for cannabis, such as unauthorized distribution, or efforts by organized crime groups to circumvent regulated supply chains for illicit gain.
These enforcement measures are part of the government's broader commitment to make communities safer and crack down on organized crime by addressing vulnerabilities in the mail system exploited by criminal actors to traffic harmful contraband.
Clarifying Public to Private Information Sharing
Information sharing is internationally recognized as a best practice for an effective anti-money laundering and anti-terrorist financing regime. In February 2025, Canada launched a new Integrated Money Laundering Intelligence Partnership (IMLIP) between law enforcement and Canada's big banks. This partnership bolsters Canada's responsiveness to organized crime and sophisticated money laundering schemes.
- To support the IMLIP, Bill S-8 proposes amendments to the PCMLTFA, with related amendments to the Personal Information Protection and Electronic Documents Act, to clarify public to private information sharing provisions by allowing regulated businesses to receive and use information disclosed by law enforcement for anti-money laundering purposes.
Risk Warning: Cryptocurrency is a unregulated virtual notoriously volatile instrument with a high level of risk. Any news, opinions, research, data, or other information contained within this website is provided for news reporting purposes as general market commentary and does not constitute investment or trading advice.
