Unregistered Crypto Services Bypass Canadian Financial Laws
A recent CBC investigation has uncovered a growing network of unregulated crypto-to-cash services operating across Canada. These platforms enable large-scale anonymous financial transfers while bypassing anti-money laundering laws.
The investigation revealed alarming practices among these services:
- A Toronto outlet handed over $1,900 in cash using only a $5 bill for verification
- Ukraine-based exchange 001k offered to deliver $1,000,000 in cash in Montreal
- Over 20 crypto-to-cash services were found operating unregistered across Canada
These operations create untraceable money trails that financial intelligence agencies cannot track. Despite Canadian regulations requiring full verification for transactions over $1,000, many services continue operating with minimal confirmation requirements.
Financial experts have raised serious concerns about these platforms enabling money laundering, illicit trade, and other financial crimes. The investigation shows how this underground financial movement operates in plain sight while escaping regulatory oversight.
Cash Handovers Require Minimal Verification
In one documented case, a midtown Toronto branch of a registered money transfer business arranged a $1,900 cash pickup through encrypted Telegram messages. The customer had transferred 2,000 tether tokens to Ukraine-based crypto exchange 001k.
The only verification required was a photo of a Canadian $5 bill. After showing the physical bill, the customer received $100 notes from the teller without further questions.
This transaction clearly violates Canada’s anti-money laundering regulations. These laws require personal identification and transaction documentation for any transfer exceeding $1,000.
The company later claimed a rogue manager had arranged the deal using personal funds off the official books. They said the teller acted without knowing the transaction’s true nature.
Notably, 001k is not registered with FINTRAC, Canada’s financial intelligence agency. This means the platform cannot legally conduct business with Canadians. However, the transaction proceeded without regulatory detection.
Million-Dollar Cash Offers in Major Cities
Similar patterns emerged in Montreal during the investigation. Journalists conducted anonymous conversations with crypto services, including 001k and other unnamed providers.
Both platforms offered to deliver substantial cash amounts in exchange for tether sent to designated wallets. One offered $1,000,000 while another proposed $890,000. Neither requested identification at any stage.
These platforms operate openly online through web directories and Telegram channels. Many advertise publicly and offer face-to-face cash deals in locations from Halifax to Vancouver.
The investigation identified more than 20 such services operating in Canada. Most lack proper registration or regulatory oversight despite Canada’s attempts to regulate the sector through FINTRAC.
Global Money Laundering Concerns Grow
Crypto analysis firm Crystal told CBC that crypto-to-cash services in Hong Kong alone processed $2.5 billion in 2024. Canada’s rapidly expanding market could reach similar figures if enforcement remains weak.
Digital tokens like Bitcoin, Ethereum, and Tether have made cross-border money movement easier. These cryptocurrencies can be quickly converted into untraceable cash through unregulated services.
Law enforcement typically relies on user identity verification where crypto enters or exits the financial system. When transactions occur without registration, these crucial tracking points disappear completely.
The blockchain’s inherent transparency becomes meaningless once investigators lose visibility. Anonymous conversion of digital assets into physical currency eliminates the money trail entirely.
This flexibility creates significant risks for Canadian financial security. Organized crime networks and individuals involved in illegal activities can now move large sums without detection. Without active compliance monitoring, these transactions leave no traceable connections.
Regulatory Enforcement Faces Major Challenges
Canadian regulators appear under-equipped to handle this growing problem. Crypto platforms can connect users instantly, bypassing traditional financial systems while enabling access to large cash volumes.
FINTRAC oversees more than 2,
