Bitcoin News Update: Canadian Cryptocurrency Gaps Fuel $1.3 Billion Rise in Money Laundering

Canada’s crypto-to-cash operations have come under heavy regulatory examination as ongoing investigations expose widespread loopholes that facilitate money laundering, leaving authorities struggling to keep up with the fast-evolving, largely unregulated digital asset sector. An undercover investigation recently uncovered more than 20 crypto-to-cash businesses running without registration nationwide, many of which skipped standard ID verification,

. These businesses, mainly found in metropolitan areas such as Toronto and Vancouver, have attracted criminal elements, with specialists cautioning that Canada’s patchwork regulatory system results in major enforcement blind spots .

The situation has intensified following disclosures that Binance, the largest crypto exchange globally,

from fraudulent schemes and cyber thefts on its platform during 2024 and 2025. A collaborative investigation by the International Consortium of Investigative Journalists and The New York Times revealed that wallets tied to Cambodian money laundering rings and North Korean hackers transferred over $408 million and $900 million, respectively, into Binance accounts. Although Binance has promised to strengthen its compliance protocols after a $4.3 billion settlement with U.S. authorities, these revelations highlight ongoing weaknesses in international crypto regulation .

Canada’s regulatory difficulties are further complicated by its position as a leading location for

ATMs, with more than 3,000 machines—the second-largest number worldwide. The combination of these ATMs and insufficient oversight of money service businesses has created an environment ripe for illegal activities. FINTRAC, the national financial intelligence agency, to oversee its more than 2,600 registered operators, not to mention the unregistered entities identified in the probe. “The truth is, nobody is asking questions,” said Nick Smart from Crystal Intelligence, in 2024.

In light of these issues, Canada is moving forward with its most extensive crypto regulations yet, including stablecoin guidelines inspired by the U.S. GENIUS Act. The 2025 federal budget will mandate that stablecoin issuers hold full reserves and establish strong risk management frameworks, with the Bank of Canada dedicating $10 million to regulatory oversight

. At the same time, Singapore’s SGX has to address rising institutional interest, reflecting a wider trend toward regulated crypto markets.

This crisis has also reignited discussions about the impact of high-leverage trading on market volatility. A recent 24-hour period saw liquidations surpass $1.1 billion—mostly from long positions—drawing parallels to the FTX collapse in 2022, as Bitcoin’s value fell by more than 22% from its October high. While Kraken CEO Michael Sethi minimized concerns over the price drop,

regarding the risks of crypto volatility.

As regulators work to address these problems, the future of the industry depends on finding a balance between fostering innovation and ensuring accountability. With Canadian authorities taking action—such as the confiscation of $56 million CAD from TradeOgre—in a crackdown on illegal operators

, the ongoing struggle remains to support growth while preventing abuse.