Canada Might Soon Ban Bitcoin ATMs. A Sign Of Cryptos’ Evolution?

Bitcoin and other cryptocurrencies are primarily digital currencies. But members of the community also developed physical tools and infrastructures like physical wallets and Bitcoin ATMs.

It seems that for Bitcoin ATMs, this might soon be the end of the road in Canada, as the country’s government is proposing to ban them entirely. It calls these ATM machines a “primary method” for scams as data and law enforcement link them to rising losses.

This is not a new idea, as already in 2018, the Canada Revenue Agency (CRA) commissioned an investigation on Bitcoin ATMs to find out if tax laws were being followed by users, and in June 2019, Vancouver was considering a ban on the machines due to money-laundering concerns.

This raises the question of the real utility of Bitcoin ATMs, what kind of scams the Canadian government has linked them to, and if these measures are a sign of policy to come in Canada and other countries.

Bitcoin ATMs History

The first Bitcoin ATM was launched in Vancouver, Canada, in 2013, suggesting that Bitcoin ATMs might ultimately have been both born and die in Canada.

The idea was to reduce the hurdles toward widespread Bitcoin adoption, with an infrastructure that people were more familiar with, and pushing the idea that Bitcoin is a currency like any other.

Over time, Bitcoin ATMs improved their technology, offering more robust interaction with Bitcoin’s blockchain network, an improved interface, better digital wallet integration, and overall better customer support and a smoother customer experience.

This created a way for people to acquire Bitcoin with just a digital wallet and a Bitcoin ATM. It did not require learning about exchanges, nor having a bank account, an issue for still a significant portion of the world population, especially in developing countries.

Some Bitcoin ATM only offer the possibility to buy Bitcoin with cash or debit card, some are bidirectional and also allow for the withdrawal of cash from Bitcoin.

To comply with local financial regulations, many Bitcoin ATM providers require users to have an existing account to transact on the machine, as well as limits on deposits and withdrawals.  In some jurisdictions, operating Bitcoin ATMs requires a money transmitter license.

As of 2025, there are more than 37,000 Bitcoin ATM all over the world. Of this number, the large majority are located in the USA, with around 28,000 Bitcoin ATM in the country, followed by Canada (4,000 ATMs) and Australia.

Source: CBC

Banning Bitcoin ATMs

Canada Bitcoin ATMs Ban Explained

Canada’s argument for banning Bitcoin ATMs is more focused on how they are used to cash out money from scams.

“To protect Canadians by shutting down a primary method for scammers to defraud victims, and for criminals to place their cash proceeds of crime.”

Canada’s financial intelligence agency, FINTRAC, came to that conclusion in a February 2023 analysis of suspicious transaction reports submitted to the agency.

“FINTRAC judges that Bitcoin Automated Teller Machines (BATMs) will continue to be the primary method that domestic and international criminal perpetrators of fraud will use to obtain funds from their victims and to launder those proceeds within the cryptocurrency ecosystem. Criminal groups are developing innovative and sophisticated fraud campaigns to direct Canadians to place funds in BATMs.”

A key issue is that most transactions only require a phone number if depositing under $1,000, and, unlike a bank, there’s no human interaction or teller trained to recognize a fraud unfolding.

Not The First Ban, Nor The last

In March 2022, the UK’s Financial Conduct Authority (FCA) declared that all cryptocurrency ATMs in the country were illegala nd ordered them closed.

The FCA cited a failure to comply with know your customer laws (KYC), which track and prevent money laundering, as well as the high risk to customers, due to a lack of regulation and protection.

Meanwhile, Australia introduced daily transaction limits in the summer of 2025 following a major investigation from its financial intelligence agency and police services.

New Zealand is also proposing a ban on the machines.

Similarly, half of the U.S. states have proposed or implemented laws to impose measures like daily transaction limits per customer, caps on transaction fees, and requirements that operators issue refunds to scam victims.

Overall, the likely upcoming ban in Canada comes as a part of a global trend and a crackdown on Bitcoin ATMs, as criminal networks have become too proficient at using them to move dirty money.

Are Bitcoin ATMs Just Useful For Scams?

What Scams Use Bitcoin ATMs?

One type of scam targets the ATMs themselves: fake QR codes. Scammers may paste fake QR codes on the ATM screen, ensuring that even if a victim is buying for themselves, the cryptocurrency is sent to the scammer’s wallet.

Other scams are more “traditional”, like impersonation of the IRS, FBI, Social Security, or tech support, or telling victims that their bank account is compromised and must move their money to a “secure” crypto wallet (belonging to the scammer), or “romance scams” with fake online relationships and eventually claims they need urgent funds for emergencies.

At the core of these issues is that transactions on the Bitcoin network are irreversible, and also hard to track when no proper KYC (Know Your Customers) system is in place.

In that context, the minimal security and regulation of Bitcoin ATMs make them extra attractive for criminals compared to mainstream crypto exchanges, which require a lot more information from their users.

This type of scam also tends to prey on people who are not very tech-savvy. So the ease of use of Bitcoin ATMs makes them perfect to push urgency and fear, guiding them step-by-step through the process until the money is stolen for good.

Legitimate Bitcoin ATMs Use Cases?

Despite these scams and criminal use of Bitcoin ATMs, they are also useful for several legit use cases.

For example, they help preserve crypto users’ privacy for small transactions. For those who prefer not to have crypto-related charges appear on their bank or credit card statements, cash-to-crypto ATMs offer a layer of financial privacy.

They also allow for quick “on-ramping”, with transactions doable in less than 10 minutes compared to several days to get registers in major exchanges.

Lastly, they provide a unique way for unbanked people to access cryptos, be it for direct trades or international remittance, potentially saving them a lot of money. As most unbanked people are usually already not rich, these savings can be very impactful on their finances.

Can Bitcoin ATMs Be Saved?

It is clear that governments globally that were friendly to Bitcoin ATMs are now reconsidering their positions. And there are legitimate concerns, as it appears that the rate of illicit activity at crypto ATMs is double that of the overall crypto industry: already in 2022, illicit volumes in the cash-to-crypto industry stood at 1.2% of total volume, double the 0.63% for the overall crypto ecosystem.

Solving the problem might, however, be tricky for Bitcoin ATM operators. The very same characteristics that make them useful to legitimate users are the same that make them attractive to criminals: anonymity, ease and speed of onboarding, cash-to-Bitcoin instant transfers, etc.

Most likely, Bitcoin ATMs will need to deeply revise their business model if they want to survive in a crypto industry that is increasingly converging with the mainstream financial system. As regular crypto exchanges are getting closer to banks in terms of compliance, so the Bitcoin ATMs will need to be closer to traditional ATM systems.

One obvious improvement would be to reduce the ease with which someone can join a new Bitcoin ATM system. Slower onboarding would not remove the possibility of low-cost remittance or serving unbanked people, but it would remove the possibility of scammers forcing people to use them under fake pretenses and pressures.

It is yet to be seen if this will be enough to convince regulators that Bitcoin ATMs need to be kept around.

In addition, as cryptos are becoming more and more part of the mainstream financial architecture, the arguments about ease of access become weaker.

Investing In Compliant Bitcoin Uses

Gemini Space Station

As cryptocurrencies are becoming more mainstream, the expectation of compliance with financial regulation is growing, not just for Bitcoin ATMs but also for crypto exchanges.

Gemini (GEMI) has, from inception, positioned itself as a compliance-first crypto exchange, prioritizing regulatory approval, institutional partnerships, and security over rapid expansion. A mantra of the company is illustrating how it went into the opposite direction of most tech startups and a large part of the crypto community:

“Ask for permission, not forgiveness”.

This reputation and certifications helped Gemini build a bridge with institutional investors for Gemini spot and derivatives trading, custody, and “eOTC” (eOTC, Gemini’s automated Over-The-Counter trading platform).

It offers hedge funds “tight spreads, deep liquidity, and fast execution are available across multiple products, accessing both spot and derivatives trading.”

The company also offers tokenized stocks and on-chain equities, its Gemini credit card, and its own stablecoin, Gemini dollar (GUSD), crypto staking services, perpetual contracts, and a recent entry in prediction markets.

From ETFs and custody services to tokenized stocks and regulated prediction markets, Gemini is building infrastructure designed to bridge traditional finance and blockchain markets.

As the “wild west” era of crypto is likely reaching an end with cryptocurrencies becoming more accepted, this positioning could be the right one among exchanges.

(You can read more about Gemini in our investment report dedicated to the company.)

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