Canada Establishes New Financial Crime Agency, Contrasting With US Approach

Canada is set to establish a new law enforcement agency called the Financial Crimes Agency (FCA) to investigate and prosecute financial crimes, a move that stands in stark contrast to the United States, where federal investigative agencies have been weakened and the administration has pardoned convicted money launderers.

The bill to create the FCA completed its first reading in Parliament this week. The ruling Liberal Party introduced the legislation and, with a majority in Parliament, is likely to pass the bill quickly in both chambers.

The new agency, tasked with investigating and prosecuting financial crime, is the result of a public inquiry that found Canada lacks a comprehensive anti-money laundering strategy, leaving the country lagging behind other nations worldwide.

“The fact that we are actually seeing the creation of a new law enforcement agency is a meaningful investment, and hopefully it shows an understanding of the severity of the challenge,” said Jessica Davis, a former intelligence analyst at Canada’s intelligence agency who specializes in tracking terrorist financing and illicit finance.

Alongside the new law enforcement body, Canada will also ban cryptocurrency ATMs. Officials say these machines have been used by scammers to defraud victims and by criminals to launder money from illegal activities. Canada has nearly 4,000 cryptocurrency ATMs, the highest per capita in the world.

For over 25 years, the Financial Transactions and Reports Analysis Centre (Fintrac) has served as Canada’s financial intelligence unit. Last year, it flagged $45 billion US in transactions related to money laundering, counter-terrorist financing, sanctions, and reporting evasion.

“That number could be too high or too low—we still don’t fully understand the scope of financial crime in this country,” said Davis, who runs the consulting firm Insight Threat Intelligence.

Fintrac does not track and arrest criminals; instead, it passes investigations to police and prosecutors. Under the new law, the FCA will conduct investigations and prosecutions, a move that reduces the scope and mandate of Fintrac and the Royal Canadian Mounted Police (RCMP).

“The challenge for the RCMP is that they have been unable and unwilling to really investigate and sustain investigations into financial crime,” Davis said. “There is a lack of funding, a lack of skills, a lack of resources, and a lack of political will. But financial crime investigations are long, complex, and require sustainable resources. I hope we will see that established.”

A 2024 report on the scale of financial crime estimated that over $3 trillion US in illicit money flowed through the global financial system the previous year. Among the biggest contributors were money laundering for human trafficking and drug smuggling, as well as terrorist financing. A 2024 report from the US Treasury Department found that these efforts have had “devastating economic and social impacts” on people.

Canada’s effort contrasts sharply with the current US administration’s approach to financial crime. Donald Trump’s government pardoned Changpeng Zhao, who called himself the “king” of cryptocurrency, after he pleaded guilty to money laundering. His company, Binance, was fined a record $4.3 billion US for facilitating terrorist financing.

In a letter to federal oversight agencies in January, senior Democratic lawmakers requested an investigation into Trump’s decision to reassign more than 25,000 employees from investigating fraud, tax evasion, and money laundering to prioritize immigration enforcement.

“The Trump administration is letting financial criminals off the hook for all sorts of wrongdoing,” said Senator Elizabeth Warren of Massachusetts in a statement. “Instead of protecting American families from fraud and predatory behavior, the administration is diverting resources to pursue its inhumane immigration agenda. No one is above the law, and the Trump administration needs to stop coddling financial criminals.”

“Canada and the US are heading in two different directions,” Davis said, adding that the US is still “far ahead of us in prosecution capacity and investment, investigation, and prosecution” of financial crime. “We still have a lot of catching up to do. Hopefully, Canada will strengthen its ability to protect Canada. Because what happens in the US tends to happen in Canada. So this new agency is a bulwark against that.”

The creation of the new law enforcement agency has been welcomed by anti-corruption groups. “The Canadian government is proposing an ambitious but realistic mandate for this agency, a necessary first step to improve our financial crime enforcement,” said Salvator Cusimano, executive director of Transparency International Canada. “Once established, the agency must coordinate closely with other enforcement and regulatory bodies across the country, and build on their efforts, if it is to reach its potential.”

It remains unclear how easily the agency will cooperate with the RCMP, where it will be headquartered, and whether it will primarily draw resources from other units.

“This agency will matter to Canadians because when you start combining things like economic pressure, the cost of living, and the real hardship for ordinary people, we become less tolerant of those who make money off us,” Davis said. “This is a substantial and necessary investment for Canada. But we will also need to keep pressuring the government to continue funding and prioritizing it, to truly achieve some of the results we are looking for.”