A CBC investigation has raised questions about whether Canada’s booming crypto ATM industry depends on fraud to remain profitable. Former employees say many transactions involve scam victims, while operators insist they try to prevent fraud and operate legitimately.
A CBC News investigation has revealed deep concerns about the role of fraud in Canada’s crypto ATM industry, raising questions about whether the sector could survive without scam-related transactions.
Former employees from four Canadian operators told CBC that fraud was a constant problem inside the business. Half of them said they believed their employer would not be profitable without scam victims. The other half said the companies would still make money, but less.
Lewis Bell, a former support worker for Localcoin, Canada’s largest operator, recalled taking daily calls from customers who had unknowingly sent their life savings to fraudsters. “It’s tough, basically breaking the worst news possible to someone,” he said. Localcoin declined CBC’s requests for comment.
Three of the country’s top six companies — HODL Digital Services, Bitcoin Depot, and CoinFlip — told CBC they do not profit from fraud and have put in place measures to detect and stop it. These include transaction limits, prompts warning customers about potential scams, and refunding fees when fraud is discovered. HODL president Sam Mokbel said the “vast majority” of transactions on his machines are under $1,000, making them less attractive to fraudsters.
However, critics argue the industry’s high fees — often between 15 and 30 per cent — and its convenience compared to regulated exchanges make it a prime vehicle for criminals. Det. David Coffey of the Toronto police financial crimes unit said he sees “no legitimate reason” for crypto ATMs, pointing to alternative exchanges that charge far lower fees.
Marc Grens, who once operated more than 1,000 machines in the United States, shut down his business citing overwhelming fraud. “To do the right thing is not profitable in this industry,” he said.
Canada has more crypto ATMs per capita than anywhere else in the world, with major operators running hundreds of machines across the country. While companies insist they are working to block scams, experts warn that unless the entire industry raises standards, victims will simply move from one operator to another.
