Canada’s Financial Transactions and Reports Analysis Centre of Canada (Fintrac) believes criminals are likely to use cryptocurrency more and more to move, hide and raise funds outside of the traditional banking system.
In its latest annual report released on Monday, Fintrac highlighted the role of virtual assets in money laundering and terror financing. The most common form of money laundering involving virtual currencies is the transfer of proceeds from fraud and ransomware.
Fintrac collects data from a variety of sources including banks, insurance companies, money service businesses, securities dealers, realtors, casinos, and other institutions. It then provides intelligence about suspected crimes to the police and other law enforcement agencies.
Sarah Paquet, director of Fintrac, said: “Fintrac continues to operate in a challenging environment with new and evolving technologies and financial products, rapidly shifting global financial systems and geopolitical events constantly shaping our work.”
Businesses exchanging foreign currency, selling money orders, travellers’ cheques or transferring money or cash are required to register with Fintrac. Before offering these services, it is important to consult with the appropriate authorities.
The use of unregistered financial services businesses poses a challenge to those who seek to detect money laundering or terrorist financing via traditional financial channels. In May 2022, Fintrac published an advisory to assist businesses and the public in protecting themselves against illegal activities related to underground banking.
The key characteristics of underground banking were explained in this advisory, particularly through unregistered Money Services Businesses in Metropolitan Areas, such as Vancouver, the Greater Toronto Area and the Calgary-Edmonton corridor.
Since then, Fintrac’s report states there has been an increase in the reporting of money laundering associated with underground banks and the identification of individuals or entities suspected of operating unregistered money service businesses.
The report also states that criminals and terrorists continue to find it attractive to engage in illegal activities, such as terrorist financing or evading sanctions, by banking with unregistered money service businesses.
