As fraudsters and terrorists increasingly turn to cryptocurrency, a Canadian intelligence agency is warning about the risks posed by an emerging industry in the country that offers discreet means of converting cryptocurrencies into large sums of physical cash and vice versa.
A significant portion of these services across Canada are “heavily exploited for illegal purposes” and “knowingly facilitate money laundering, sanctions evasion” and a variety of “transnational organized crime activities,” according to a Canadian intelligence memorandum reviewed by the International Consortium of Investigative Journalists.
The memo’s assessment shows senior financial intelligence officials addressing a concern that some crypto experts have raised with increasing urgency over the past year: A global industry of services that convert cryptocurrencies into large sums of physical cash – often with few questions asked and under strict anonymity – has opened a gaping hole in the global bulwark against dirty money.
The Canadian assessment is dated March 2026 and was obtained through a public records request from ICIJ partner The Toronto Star. It comes from the Strategic Intelligence, Research and Analytics Unit, the information collection office of FINTRAC, the country’s agency that oversees efforts to combat money laundering and terrorist financing.
Garry Clement, who formerly headed the Canadian National Police’s anti-crime program, told ICIJ that he is not surprised by the government’s assessment.
Crypto-to-cash operators “really service professional money launderers,” Clement said. Their money, he added, “comes from drug trafficking, it comes from human smuggling, it comes from massive fraud, and it comes from a lot of cybercrime.”
The memo notes that recent media reports have highlighted the rise of such services in Canada. Last November, ICIJ and 37 other news organizations published “Coin Laundry,” a global investigation that examined illicit cryptocurrency financing around the world, including Canada’s thriving crypto-to-cash companies. These services allow cryptocurrency holders to cash out huge sums without disrupting the mainstream banking system. In this way, these operations circumvent banking systems’ traditional protections for dirty money related to organized crime, human trafficking or foreign sabotage operations.
As part of this reporting, ICIJ and its partner reporters conducted undercover transactions with these services in Poland, Ukraine, the United Arab Emirates and Canada. This included a Toronto Star reporter arranging a crypto-to-cash switch with a global organization called 001k. The reporter sent the company 2,000 crypto tokens to exchange for cash in Toronto.
Instead of asking for the customer’s name or ID, the service asked the reporter to take a photo of the serial number on a five-dollar bill and then present the same bill when handing over cash to prove that she had provided the cryptocurrency. Based on expert interviews from ICIJ’s Canadian reporting partners, this transaction likely violates Canada’s anti-money laundering laws.
001k has moved more than $14.8 billion in cryptocurrencies over the past few years, according to data from crypto tracing firm Chainalysis provided to ICIJ.
In early March, Star reporting identified a single thoroughfare in the Greater Toronto Area with 50 companies advertising crypto services, most of which appeared to be operating unlawfully.
Just weeks after the Star’s report, the Canadian government took action and revoked the registrations of dozens of crypto firms, including several crypto-to-cash firms that the Star identified as illicit.
The report is heavily edited, with one of the completely deleted sections titled “Intelligence Gaps.” It describes the crypto companies that fit into nondescript corridors of everyday commerce such as shipping centers, rented co-working spaces and shopping malls.
“Although these companies often pose as intermediaries for legitimate cryptocurrency transactions, many appear to operate without customer due diligence, provide anonymity beyond what centralized exchanges provide, and actively circumvent” traditional anti-money laundering protections, the report said.
In an email, a FINTRAC spokesperson told ICIJ that in recent years it has focused heavily on investigating and enforcing violations of the law by virtual currency traders. So far this year, the regulator has revoked the registrations of 123 crypto companies, the spokesman said.
Clement told ICIJ that the latest intelligence assessment would only be useful if it was supported by meaningful enforcement, which he said had not been the case in recent years.
“The bottom line is that if you don’t do anything about a situation when it’s just starting, it will expand,” Clement said. “That’s exactly what happened in this country.”
Emma McIntosh and Sheila Wang contributed additional reporting.
https://www.icij.org/investigations/coin-laundry/canadian-intelligence-flags-crypto-to-cash-services-as-knowingly-facilitating-money-laundering-document-shows/
