Money laundering and terrorist financing remain major threats to Canada’s financial ecosystem. In response, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is introducing new anti-money-laundering (AML) regulations in 2025.
These changes aim to strengthen Canada’s financial integrity and align with evolving global standards. The following post explores why new AML regulations in Canada are being implemented, what businesses should expect, and how fintech companies can prepare.
What Does FINTRAC Do: Role in AML Regulations Canada
FINTRAC is Canada’s national financial intelligence unit. It monitors transactions, identifies suspicious activity, and ensures that fintechs, including money service businesses (MSBs), comply with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
The organization’s mission is to protect the financial system from misuse while respecting individual privacy rights. Every amendment to FINTRAC regulations reflects a balance between security, innovation, and compliance.
Why is FINTRAC Implementing New AML Regulations Canada?
Canada’s regulatory landscape evolves constantly to adapt to the changing financial market. The year 2025 has been all about the implementation of new AML regulations for cheque cashers, MSBs, payment service providers (PSPs), and other fintech business models. Let’s look at the reason behind this:
- Increased Sophistication of Financial Crimes
Cybercrimes, digital currency, and cross-border transactions have introduced new vulnerabilities in the financial sector. Criminals are increasingly using fintech platforms and electronic wallets to transfer funds illegally.
To counter illicit activities, FINTRAC is updating reporting requirements for enrolled entities, registered MSBs, licensed PSPs, and other businesses. Transactions equal to or above $10,000 in cash, deposits, or donations will be prohibited by the agency. This new PCMLTFA offence will come into effect once Bill C-2 is passed.
- Alignment with Global Standards
Canada is a part of the Financial Action Task Force (FATF), an intergovernmental body that sets international AML/CTF (counter-terrorist financing) standards. The new 2025 AML regulations are a part of the country’s ongoing efforts to align its regulatory framework with global standards set by the FATF. These updates focus on:
- Enhancing beneficial ownership transparency
- Tightening oversight of virtual asset service providers (VASPs)
- Strengthening reporting obligations for financial institutions and MSBs
By implementing new reforms, FINTRAC aims to improve financial sector accountability and reinforce its commitment to preventing illicit financial activity at domestic and international levels.
- Closing Regulatory Gaps
Since 2020, new business models such as crowdfunding platforms and payment service providers have entered the regulatory scope of FINTRAC. The agency has designed the latest AML regulations to close the gaps in the supervision of new business models entering the fintech sector.
Businesses operating in Canada will now need to demonstrate better compliance measures, thorough risk assessments, and strict transaction monitoring.
New AML Regulations 2025: Expected Key Changes
The 2025 AML regulations mark a major shift in compliance expectations for businesses across multiple sectors. Among the most significant updates are the new requirements for mandatory enrollment, cash transaction limits, and enhanced compliance obligations:
- All reporting entities, except MSBs, will be required to enroll with FINTRAC (MSBs are exempt only because their existing licenses already cover this obligation)
- A new offence under the PCMLTFA will prohibit entities from accepting cash transactions over $10,000, with limited exemptions for certain financial institutions
- Compliance program requirements will become legally enforceable, meaning all entities must maintain documented, auditable, and risk-based AML programs
- Administrative monetary penalties (AMPs) will range from $40,000 for “minor violations” to up to $20 million or 3% of global revenue for “very serious” violations
FINTRAC has the authority to assess the adequacy of compliance programs and impose penalties where deficiencies exist. If a business violates the PCMLTFA, it must enter into a mandatory compliance agreement with FINTRAC or face further action.
Prepare Your Business for New AML Regulations 2025
Complying with the new AML regulations in Canada means staying informed about evolving legal standards and strengthening your internal frameworks. You must enhance your business’s transaction monitoring, recordkeeping, and risk-based assessment practices to meet FINTRAC’s updated expectations.
At Renno Co. & Fintech, we help you navigate the evolving 2025 AML regulations in Canada with confidence and clarity. Our regulatory compliance experts guide clients through AML practices to meet new national and global FATF standards.
We ensure your policies and reporting frameworks align with updated PCMLTFA obligations. Whether you operate as an MSB, PSP, or fintech startup, our tailored advisory services simplify complex compliance requirements and help your business stay fully prepared.
FAQs
Why Does FINTRAC Frequently Change AML Regulations Canada?
FINTRAC is frequently updating its AML regulations to align its regulatory framework with global standards and reduce financial crimes in Canada by imposing greater scrutiny.
Who Needs to Comply With AML Regulations Canada?
Money service businesses, payment service providers, crypto exchanges, financial services businesses, merchant account providers, and remittance companies that fall under FINTRAC governance must comply with the new AML regulations 2025.
When Will New AML Regulations Take Effect?
The new AML regulations are expected to take effect in late 2025. As the changes have been proposed under Bill C-2, the new rules will be implemented once the bill has been passed by the Canadian government.
How to Keep Yourself Updated With New AML Regulations?
You can read the latest news in the fintech sector to update yourself on new regulations. Another way to stay informed is to work with professionals who specialize in fintech and regulatory compliance, such as Renno Co. & Fintech.
Let Renno Co. & Fintech Assist You in Complying With New AML Regulations Canada
Navigating the new AML regulations in Canada may seem challenging if you don’t know the changes that have been proposed by FINTRAC in Bill C-2. We can assist you in understanding the new rules and why they’re being implemented.
Our team continuously monitors updates from FINTRAC, the Bank of Canada, Revenu Quebec, and other regulatory bodies in the country. Contact us today to speak to one of our fintech advisors and prepare for the new AML regulatory changes with confidence.
