On April 27, 2022, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) introduced new guidelines that significantly extend AML/ATF obligations to crowdfunding platforms and online payment service providers. These changes were catalyzed by the misuse of crowdfunding portals in politically sensitive events, such as the 2022 “Freedom Convoy” protests, which revealed vulnerabilities in financial oversight for non-traditional fundraising mechanisms.
Under the revised guidance, crowdfunding platforms are now treated as money services businesses (MSBs), requiring registration with FINTRAC. These platforms must implement robust Know Your Customer (KYC) procedures, ongoing transaction monitoring, and suspicious transaction reporting. The updated rules also apply to payment processors that act as intermediaries in fundraising campaigns, compelling them to screen transactions for red flags, such as links to politically exposed persons (PEPs) or sanctioned entities.
The new regulations are expected to have a ripple effect across Canada’s fintech ecosystem. Startups and smaller platforms face compliance burdens that may require outsourcing AML functions or integrating third-party regtech tools. Meanwhile, established players must revisit their internal control frameworks to ensure compliance with the nuanced requirements of the new guidelines.
For AML professionals, this change marks a new regulatory frontier. The focus has expanded beyond traditional financial institutions to platforms with broad societal reach and decentralized operations. It’s essential to incorporate crowdfunding-specific red flags, update training materials, and improve incident escalation workflows. As Canada strengthens its AML regime, other jurisdictions may follow suit, creating a new global standard for digital fundraising oversight.
Source: Crowdfunding platforms and certain payment service providers must register with FINTRAC and the definition of “EFT” has been amended
Image Source: Wikimedia Commons: File:Financial Transactions reports analysis center of Canada Logo FINTRAC.png
