Canadian Fintech Firm Linked To Money-Laundering Network Insists It Is Not A Bank, Which Is The Only Honest Thing It Has Said
A Canadian company that used the word "banking" in its marketing materials has been linked to a sanctioned money-laundering network, and its defence is technically airtight: it was never a bank.
This is the great loophole of Canadian financial regulation. We have some of the most conservative chartered banks on the planet, institutions so cautious they will freeze your account for buying a couch in Windsor, and then a parallel universe of companies that describe themselves as "banking solutions" and are supervised by roughly the same number of people who inspect a county fair Tilt-A-Whirl.
The federal regime for money services businesses requires registration with FINTRAC. Registration is not a licence. It is closer to a mailing list. You fill in a form, you receive a number, and then you may print that number on a glossy website featuring a stock photo of a woman looking confidently at a tablet.
Canadians take enormous national pride in our banking stability. We mention 2008 constantly, usually to Americans, usually unprompted. What we mention less often is that the stability lives in six towers on Bay Street and does not extend to the storefront beside them offering "global settlement infrastructure" out of a unit shared with a vape wholesaler.
The company has retained counsel and denies wrongdoing.
Regulators have promised a thorough review, which in this sector means someone will finally read the registration form.
It was filled out correctly. That was never the problem.