top of page
  • Writer's pictureDeborah

On May 5, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) published a Sectoral and Geographic Advisory concerning underground banking through unregistered money services businesses (MSBs) operating in Metro Vancouver, Greater Toronto Area and the Calgary-Edmonton Corridor. Such businesses do not fulfil the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and are susceptible to criminal misuse.


The report highlights three broad trends linked to underground banking and suspects unregistered MSBs:

  1. Use of money mules

  2. Suspected money mule accounts are identifiable because high volume third-party cash deposits do not align with the client profile. Subsequently, funds are rapidly depleted via email money transfers to unrelated third parties

  3. Use of email money transfers and international wire transfers

  4. Co-mingling of personal/business funds and use of both registered and unregistered MSBs


To detect and deter underground banking, the report calls for enhanced due diligence and strong compliance policies and procedures. From the consumer perspective, FINTRAC outlined actions consumers can take to better protect themselves, such as being wary of unsolicited phone calls, texts, emails or social media messages requesting personal information and offering easy money.


Restrictions in financial markets and fund transfers will continue to impact the supply and demand for underground banking. FINTRAC encourages consumers and organizations to report suspicious money laundering or the financing of terrorist activities.


Recent Posts

See All

The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities. SOFR is the overnight interest rate for US dollar-denomina

13/06/2023 - Canadian Securities Administrators (CSA) SEDAR+ go-live date. All issuer filings, cease trade orders and disciplined list entries will be filed in SEDAR+ 16/06/2023 - OSFI consultation pe

On May 11, the Bank for International Settlements (BIS) published a Handbook on how central bank digital currencies (CBDCs) could work for offline payments, defined as a “transfer of value between dev

bottom of page