Fraud accounts for rising share of money-laundering offences, FinTRAC reports

Cryptocurrency and cyber-enabled fraud are increasingly becoming the source of dirty money flagged to law enforcement by Canada’s anti-money-laundering watchdog.

Nearly a third – about 31 per cent – of the intelligence that the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) shared with police in its most recent fiscal year involved fraud as the underlying crime, the watchdog said in its annual report on Monday. The report covers the period from April 1, 2025, through March 31, 2026.

That’s up from 25 per cent in 2024–25 and 20 per cent in 2023–24, and puts fraud just behind drugs as the most common underlying offences for money laundering in FinTRAC’s disclosures to law enforcement.

“With its ever-growing impact on Canadians, fraud will remain a priority focus for FinTRAC,” wrote Stéphane Sirard, interim director and CEO of FinTRAC.

Fraudsters are siphoning hundreds of millions of dollars out of the Canadian economy annually, with victims reporting $351-million in losses to the Canadian Anti-Fraud Centre in the first six months of this year. That figure represents just a fraction of the actual losses, as the centre estimates that only 5 per cent to 10 per cent of fraud is reported.

Often, that money is moved using cryptocurrency, as organized-crime groups increasingly embrace digital assets in their laundering operations, Rob Stewart, deputy minister for Canada’s new Financial Crimes Agency, said in an interview recently.

Canada’s anti-money-laundering regime requires thousands of businesses, including financial institutions, real estate and mortgage brokers, casinos and cryptocurrency exchanges, to report certain types of transactions, including suspicious transactions and large electronic funds transfers, to FinTRAC.

The centre analyzes the information it receives and discloses financial intelligence to law-enforcement and national-security agencies.

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FinTRAC made 3,007 disclosures to law enforcement during its most recent fiscal year, the highest number in a single year, the agency said. It also issued 35 notices of violation, up 52 per cent from the previous year, and penalties totaling more than $247-million, “by far the largest amount in FINTRAC’s history,” the report said.

That includes two record-setting penalties against cryptocurrency exchanges: a $20-million penalty against Seychelles-based Peken Global Ltd., which operates as KuCoin, and nearly $177-million against Xeltox Enterprises Ltd., which operates as Cryptomus.

FinTRAC also alerted law enforcement to 31 cases where businesses failed to comply with financial-crime laws in a manner serious enough to potentially warrant criminal investigation, and the agency revoked the registrations of 82 money-services businesses during the fiscal year. (Money-services businesses is a category that includes cryptocurrency exchanges.)

The agency said it revoked those registrations because the businesses did not respond to clarification requests or demands for information.

“This information, including crypto wallet addresses, is crucial to our ability to ensure and enforce compliance and track the proceeds of crime across jurisdictions,” FinTRAC said.

The watchdog said it’s currently implementing recent legislative changes into its framework, including increases to the size of the financial penalties it’s able to issue by up to 40 times.