Canada Tightens Crypto Regulations, Increases Penalties and Scrutiny

Canada's regulatory environment has undergone significant changes for cryptocurrency businesses in 2026. The country's previous reputation as a pragmatic jurisdiction for crypto companies has given way to a more demanding regime.

The implementation of the Crypto-Asset Reporting Framework (CARF) on January 1, 2026, has introduced new tax-reporting obligations for crypto service providers with Canadian users. This adds an extra layer of complexity to existing Anti-Money Laundering (AML) duties. Operators must now collect transaction-level data in line with the OECD standard and submit reports to the Canada Revenue Agency by 2027.

Additionally, two key pieces of legislation received Royal Assent on March 26, 2026: Bill C-12 and Bill C-15. The former introduced significant amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, including a fortyfold increase in maximum administrative monetary penalties from CAD 500,000 to CAD 20 million per violation.

FINTRAC has already demonstrated its increased enforcement posture by revoking approximately 47 crypto-linked Money Services Business registrations since the start of 2026. This signals that a template compliance program is no longer sufficient for operators in Canada.