Fraud growing dirty money source: report

By the Editorial Team · Monday, October 26, 2026

Canada’s FinTRAC reported that fraud-related offenses, especially those involving cybercrime and cryptocurrency, accounted for nearly 31 percent of its intelligence disclosures to law enforcement in the 2025–2026 fiscal year, marking a sharp increase from previous years. This rise underscores the growing role of fraud in money laundering activities, prompting record fines against cryptocurrency exchanges and regulatory reforms aimed at tightening anti-money laundering enforcement.

Canada’s Financial Transactions and Reports Analysis Centre (FinTRAC) has identified fraud, particularly cyber-enabled and cryptocurrency-related schemes, as an increasing source of illicit funds flagged to law enforcement. In its annual report covering the fiscal year from April 1, 2025, to March 31, 2026, FinTRAC revealed that nearly 31 percent of the intelligence it shared with police involved fraud-related offenses, marking a significant rise from 25 percent the previous year and 20 percent in 2023–2024.

Fraud now ranks just behind drug-related crimes as the second most common underlying offense linked to money laundering in FinTRAC’s disclosures. Stéphane Sirard, interim director and CEO of FinTRAC, emphasized that fraud’s growing impact on Canadians will continue to be a priority for the agency.

The Canadian Anti-Fraud Centre reported that victims lost approximately $351 million to fraud during the first half of 2025, although these figures are understood to represent only a fraction of the true losses, as the centre estimates that between 90 and 95 percent of fraud incidents go unreported. Organized-crime groups have increasingly adopted cryptocurrency as a vehicle for laundering these illicit proceeds, according to Rob Stewart, deputy minister for the country’s Financial Crimes Agency.

Canada’s anti-money laundering framework requires a broad range of businesses—including financial institutions, real estate and mortgage brokers, casinos, and cryptocurrency exchanges—to report suspicious transactions and large electronic funds transfers to FinTRAC. The agency analyzes this data and shares financial intelligence with law enforcement and national security agencies.

During the 2025–2026 fiscal year, FinTRAC issued a record 3,007 disclosures to law enforcement, the highest annual total to date. The agency also issued 35 notices of violation, a 52 percent increase over the previous year, and imposed penalties exceeding $247 million, marking the largest amount in its history.

Notably, two cryptocurrency exchanges faced historic penalties: KuCoin, operated by Seychelles-based Peken Global Ltd., was fined $20 million, while Xeltox Enterprises Ltd., which operates Cryptomus, received nearly $177 million in penalties. FinTRAC further flagged 31 cases where business non-compliance with financial crime laws raised concerns serious enough to potentially prompt criminal investigations.

In addition, FinTRAC revoked the registrations of 82 money-services businesses—including cryptocurrency exchanges—after those entities failed to respond to requests for information or clarification. The agency underscored the importance of access to detailed data, such as cryptocurrency wallet addresses, for enforcing compliance and tracking illicit funds across jurisdictions.

FinTRAC is also moving forward with incorporating recent legislative changes that enhance its regulatory powers, including increasing maximum financial penalties by up to 40 times, as part of ongoing efforts to strengthen Canada’s fight against money laundering and financial crime.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.