The federal government is proposing a ban on crypto ATMs as part of its 2026 Spring Economic Update, citing concerns that the machines are being used by scammers to defraud Canadians and by criminals to move proceeds of crime. The proposal comes as reported fraud losses in Canada continue to climb, with more than $704 million lost last year and over $2.4 billion reported since 2022.

The Canadian government is proposing a ban on crypto ATMs as part of a broader effort to combat financial crime and protect fraud victims.

The proposal was included in Canada’s 2026 Spring Economic Update, released on April 28, 2026. The government said the measure is intended to shut down what it described as a key method used by scammers to defraud victims and by criminals to place proceeds of crime into the financial system.

Crypto ATMs allow users to convert cash into digital currencies such as bitcoin and send those funds to digital wallets. While the machines are promoted by some as a convenient way to access cryptocurrency, they have also become a recurring feature in fraud schemes, particularly where victims are pressured to send funds quickly and irreversibly.

The government’s update pointed to the growing sophistication of consumer fraud, including the use of technology to target victims. According to the report, Canadians lost more than $704 million to fraud last year, bringing total reported losses since 2022 to more than $2.4 billion.

The real figure is likely much higher. The update noted that only an estimated five to 10 per cent of consumer-targeted fraud incidents are reported, meaning the scale of financial harm may be significantly undercounted.

Crypto ATMs have drawn increasing scrutiny in other jurisdictions as well. Regulators and consumer protection agencies have raised concerns that the machines are frequently used in government impersonation scams, business impersonation scams, tech support scams, and other schemes where victims are instructed to deposit cash and transfer cryptocurrency to a scammer-controlled wallet.

Supporters of restrictions argue that crypto ATMs create an accessible pathway for scammers because transactions can be difficult to reverse once completed. Fraud victims may believe they are making a legitimate payment, complying with law enforcement, protecting their bank account, or resolving an urgent problem, only to discover later that the funds have been transferred beyond their control.

However, some crypto industry advocates oppose outright bans. They argue that crypto ATMs provide public access to digital currency, particularly for people who rely on cash or prefer not to use conventional financial platforms. They also warn that banning the machines may not eliminate fraud, but could instead push activity into less visible channels.

The federal proposal signals a more aggressive approach to fraud prevention in Canada, especially where cryptocurrency infrastructure intersects with consumer scams and money laundering risks. If adopted, the ban would represent a significant step in limiting public access points for cash-to-crypto transactions.

For fraud victims, the proposed measure also reflects a broader recognition that scam losses are not simply the result of individual mistakes. Increasingly, regulators are focusing on the systems, tools, and payment channels that make fraud easier to carry out at scale.

The post Canada Proposes Ban on Crypto ATMs Amid Rising Fraud Concerns appeared first on Canadian Fraud News Inc. | Fraud related news | Fraud in Canada.

Originally published on Canadian Fraud News.