Canadian watchdog FINTRAC: Fintechs Vulnerable to Money Laundering

July 24, 2019 | FinTech

The FINTRAC money laundering warning raises concerns for Fintech companies across Canada

Alert: FINTRAC money laundering warning in effect.

Documents obtained by The Globe and Mail reveal that fintech firms in sectors such as alternative lending, electronic payments, online gambling, and digital currencies are vulnerable to money laundering.

The Financial Transactions and Reports Analysis Centre (FinTRAC) has issued this warning and new rules around FinTech.

Anti-money laundering regulations

A major concern is fintechs’ inadequate understanding of the responsibility to prevent money laundering by Canadian regulations.

Financial companies, including fintechs, must verify clients’ identities, have in place suitable compliance systems, and report any out-of-the-ordinary or suspicious transactions.

In July, the Government of Canada also announced that local crypto exchanges must register by  June 1, 2020.

FINTRAC stretched for resources

Regulators will carry out inspections. However, the existing capacity of the regulator is only about 300 inspections a year. Meanwhile, there are 30,000 reporting companies in Canada.

So it is quite likely that some, or even a lot, of illicit transactions, could slip through the cracks unless Fintech firms exercise adequate vigilance.

Canada isn’t alone when it comes to warnings about money laundering. Federal Reserve Chair Jerome Powell has raising concerns about cryptocurrencies and Fintech operations around similar crimes.

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
FinTech: LatAm BNPL Provider Kueski Nabs $202M Series C Round
December 3, 2021     FinTech, News, Venture Capital

Kueski is one of the largest buy-now-pay-later (BNPL) and digital lenders in Latin America. It announced December 2 its close of a $202 million Series C debt and equity round….
Digital Assets: Renowned Investor Charlie Munger Sides With China On Its Crypto Ban
December 3, 2021     Digital Assets, News

Charlie Munger has shot off another broadside against bitcoin, endorsing China’s action in banning cryptos. A long-standing bitcoin skeptic, Munger was speaking in an interview for the Sohn Hearts &…
Venture Capital: 15-Minute Delivery Startup JOKR Raises $260M Series B
December 3, 2021     News, Venture Capital

New York-based instant grocery delivery startup JOKR has become a unicorn within nine months of its launch and raised a $260 million Series B within five months of raising $170…
Venture Capital: Porsche Buys A Stake In Sustainable Homes-Focused Startup 1KOMMA5°

Porsche, the German car maker, has taken a stake in Hamburg-based startup 1KOMMA5° through its venture finance arm, Porsche Ventures. The startup seeks to boost the rollout of presently decentralized…