Canada's New Financial Crimes Agency Will Prioritize Tracing Crypto: What Bill C-29 Means

News • October 12, 2026

TL;DR

Canada is building a new federal Financial Crimes Agency (FCA), and its deputy minister, Rob Stewart, says tracing crypto transactions will be a key priority. The agency is created by Bill C-29, introduced on April 27, 2026 and still under study by a parliamentary committee, and could launch as early as 2027 depending on when the bill passes.

Stewart singled out three targets: unregistered crypto exchanges that advertise "No KYC", stablecoins such as Tether, which he called "almost ready-made for criminality", and crypto ATMs, which Ottawa wants to ban. For ordinary token sale participants, the practical message is simple: on-chain activity is traceable, and platforms that skip identity or uniqueness checks are becoming a higher-risk place to keep your money.

Key Takeaways

Bill C-29, the Financial Crimes Agency Act, was introduced on April 27, 2026. Its definition of "financial crime" explicitly covers digital assets.
The FCA is expected to have about 230 to 250 staff, mostly civilians, with the RCMP lending around 150 people temporarily during start-up (Rob Stewart, via The Globe and Mail, October 2026).
Blockchain analysis, digital forensics, and forensic accounting are the skills the agency says it needs most.
Stewart named unregistered "No KYC" crypto exchanges, stablecoins such as Tether, and crypto ATMs as specific concerns.
Nothing is in force yet. The bill can still change, and the agency has no launch date until Parliament passes it.

Crypto's reputation problem in Canada just got a dedicated police force. In an interview at the ACAMS anti-financial-crime conference in Toronto, Rob Stewart, deputy minister responsible for setting up Canada's proposed Financial Crimes Agency, told The Globe and Mail that following digital-money trails will be one of the new agency's top priorities. Below we break down what the agency is, why crypto sits at the centre of its mandate, and what it changes for people who buy tokens through exchanges and launchpads.

What Is Canada's Financial Crimes Agency?

The Financial Crimes Agency (FCA) is a proposed federal law enforcement body dedicated only to financial crime. It is created by Bill C-29, the Financial Crimes Agency Act, which the Government of Canada introduced for first reading in the House of Commons on April 27, 2026, delivering on a commitment from Budget 2025, according to an analysis by law firm Gowling WLG.

Under the bill, the agency's mandate is to investigate financial crimes, help recover proceeds of crime, and take part in international efforts against financial crime. It reports to the Minister of Finance and will be led by a Commissioner appointed for a term of up to five years. Investigations can start on the Commissioner's own initiative or at the request of other law enforcement agencies in Canada or abroad.

Today, financial crime enforcement in Canada is split across the RCMP, provincial police forces, and regulators such as FINTRAC, Canada's financial intelligence unit. The FCA is designed to pull that expertise into one place.

Why Crypto Is at the Centre of the Mandate

The clearest signal is in the bill's text. Gowling WLG notes that Bill C-29 defines "financial crime" to include offences relating to financial assets, "including digital assets", involving laundering, trafficking or possession of proceeds of crime. Until now, Canada's federal criminal enforcement system had no institution with a mandate that explicitly named digital assets.

Stewart's own description of the problem explains why. "Crypto is a growing part of the movement of the proceeds of crime, particularly at the more organized level of financial crime, where organized crime is involved," he told The Globe and Mail. He described the pattern this way: criminals are "consolidating their cash, they're converting it to crypto, they're moving it to another jurisdiction and they're washing it back into the system."

That is why the agency's hiring plan leans on technical skills. Stewart said finding people skilled in forensic accounting, digital forensics, and blockchain analysis will be essential to the agency's success.

The Three Crypto Targets Stewart Named

1. Unregistered "No KYC" exchanges

Stewart highlighted unregistered money-services businesses, including crypto exchanges, as an area that needs more enforcement. Some, he said, openly flout the law by hanging "No KYC" signs in their windows. KYC (Know Your Customer) is the legal requirement for regulated businesses to confirm who their customers are.

This lines up with an outside assessment. The Financial Action Task Force (FATF), the global anti-money-laundering standard setter, published its 2026 mutual evaluation of Canada in late September. According to The Globe and Mail, the review gave Canada's overall regime a passing grade but flagged weaknesses in prosecuting complex money-laundering cases, seizing proceeds of crime, and supervising high-risk businesses such as virtual currency exchanges.

2. Stablecoins such as Tether

Stewart called stablecoins like Tether (USDT) "almost ready-made for criminality." The reasoning is practical: a dollar-pegged token holds its value, which makes it useful for payments, and it can cross borders in minutes. Those same features attract criminals, according to anti-money-laundering experts and law enforcement officials cited by The Globe and Mail. The newspaper also noted that Ryan Wedding, a former Canadian Olympic snowboarder accused of trafficking drugs for the Sinaloa cartel, is alleged to have used a Tether network to launder money.

Canada is regulating stablecoins on a separate track. The Stablecoin Act received Royal Assent on March 26, 2026, according to the federal Justice Laws website, and the Department of Finance says supporting regulations are still being developed. If you want the basics of how these tokens work, see our explainer on what stablecoins are and how they are used.

3. Crypto ATMs

Ottawa has introduced legislation to ban cryptocurrency ATMs, which Stewart described as "the tool of choice for street-level fraudsters." Crypto ATMs let someone turn cash into crypto quickly, which scammers exploit by pressuring victims to deposit money into a kiosk and send it to a wallet the scammer controls.

How Crypto Tracing Actually Works

The idea that crypto is untraceable is mostly a myth. Public blockchains such as Bitcoin, Ethereum, and BNB Chain record every transfer permanently, and anyone can read them. What investigators lack is the link between a wallet address and a real person. That link usually appears at the points where crypto meets the regulated world: exchanges that collect identity data, payment providers, and cash-in or cash-out services.

Blockchain analysts follow funds from wallet to wallet, cluster addresses that behave like one owner, and flag when money lands at a regulated platform that can be asked for customer records. This is also why "No KYC" exchanges and crypto ATMs worry enforcement agencies: they are the gaps where identity can drop out of the trail. You can see the raw data yourself with a block explorer; our practical guide to using a blockchain explorer shows how.

What It Means for Token Sale Participants

Most people who join IDOs or buy tokens are not the target of an agency like this. But the direction of enforcement affects where you should be comfortable holding funds.

Platforms with no identity or uniqueness checks carry more risk. An exchange that operates without registration can be shut down, frozen, or caught up in an investigation, and your funds can be stuck with it. Our look at Coinbase's push for clearer Canadian rules shows how registered platforms are positioning themselves.
Your wallet history is permanent. If your wallet receives funds from a flagged address, a regulated exchange may ask questions when you try to cash out. Using clean, well-known on-ramps reduces that risk.
Stablecoin rules will keep tightening. Many token sales are paid in USDT or USDC. Expect more checks on stablecoin flows, especially across borders.
Privacy and compliance are no longer an either-or choice. Launchpads have long chosen between full KYC (collect ID documents) and no checks at all. A third route, proof of personhood, confirms that each participant is a unique real person without storing passport scans. Kommunitas uses Human Passport for this; we explain the trade-offs in KYC vs non-KYC crypto launchpads.

Before committing to any sale, run through our IDO due diligence checklist, which covers team, tokenomics, contract audits, and platform risk.

Limits and Open Questions

Bill C-29 is still a bill. It was being studied by a House of Commons committee at the time of Stewart's interview, and its wording can change before it passes. Stewart said the agency could launch as early as next year, but that depends on the legislative timeline.

Capacity is another open question. A staff of 230 to 250 is small relative to the scale of financial crime, and the agency will rely on the RCMP for around 150 people during start-up. Blockchain analysts and digital forensics specialists are in demand worldwide, so hiring could be slow.

There are also legal limits. Gowling WLG points out that information-sharing powers under the bill may face constitutional challenges, citing the Supreme Court of Canada's decision in R. v. Bykovets, which requires police to get a warrant to obtain an IP address. Finally, the FCA is a Canadian agency. It does not change rules in other countries, although it is designed to cooperate with foreign partners on cross-border cases.

Frequently Asked Questions

What is Canada's Financial Crimes Agency?

It is a proposed federal law enforcement agency dedicated to investigating financial crimes and recovering proceeds of crime. It is created by Bill C-29, the Financial Crimes Agency Act, introduced on April 27, 2026, and reports to the Minister of Finance.

When will the Financial Crimes Agency start operating?

No date is set. Deputy minister Rob Stewart said in October 2026 that it could launch as early as next year, depending on when Parliament passes Bill C-29.

Does Bill C-29 cover cryptocurrency?

Yes. The bill defines financial crime to include offences relating to financial assets, including digital assets, that involve laundering, trafficking or possession of proceeds of crime.

Is Canada banning crypto?

No. Buying, holding, and trading crypto remains legal. Ottawa has introduced legislation to ban crypto ATMs, and the new agency will focus enforcement on criminal use, such as money laundering through unregistered exchanges.

Can crypto transactions be traced?

On public blockchains, yes. Every transfer is permanently recorded. Investigators combine this on-chain data with customer records from regulated exchanges and payment services to link wallets to real people.

Disclaimer

This article is for educational purposes only and is not legal or financial advice. Bill C-29 is proposed legislation as of October 12, 2026 and may change before it passes. Do your own research before participating in any token sale.

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