Cryptocurrency: Convert up to $10,000 per day at the local convenience store

After beer and gasoline, cryptocurrency: some 350 convenience stores now have virtual currency ATMs where you can sometimes withdraw up to $10,000 per day, out of sight. With the meteoric increase in this type of machine in Quebec, the tax authorities distributed nearly a million dollars in fines to teller operators last year.

“I never look at people using it, and I never ask questions. It’s risky,” confides the owner of a Quebec convenience store on condition of anonymity.

A few times a week, customers enter his convenience store to make a transaction. They leave a few minutes later without buying anything, and without even saying hello to the cashier. This usually happens between 9 p.m. and 3 a.m.

“They come more often when bitcoins have value. When it’s on the ground, there’s practically no one there,” explains the owner, reiterating a few times that he “doesn’t ask any questions.”

On the South Shore of Montreal, a convenience store owner says she receives $300 per month for one of these counters at the front of the store, but there is no question of her talking about it publicly either.

Hundreds of counters

The province has more than 350 of these machines, mainly concentrated in the Montreal region. However, several have started to appear all over the country.

Even though a permit is required to be able to operate these machines, Revenu Québec still does not know the exact number.

“Currently, the Money Services Business Act does not distinguish between a cryptoasset ATM and a conventional ATM,” explained the organization’s spokesperson, Mylène Gagnon, in an email. At Journal.

“New legislative provisions will come into force shortly and these provide for separate permits to be issued for crypto-asset ATMs. This modification will allow [d’en] know the number,” she added.

$9900 per day

However, these machines allow large transactions to be carried out. Localcoin, which is the largest operator of bitcoin ATMs in Quebec, has a limit of $995 per transaction, and $4,995 per day.

Instacoin, the second largest player in the market, allows its members to convert up to $9900 daily.

And that’s not all: there are at least 11 companies operating in Quebec currently, and it is possible to carry out transactions in machines of different brands.

According to a document produced by the Financial Transactions and Reports Analysis Center of Canada, most of these transactions are “probably legitimate”, but “criminals may use virtual currency ATMs to convert products illicit virtual currency” and money laundering, again according to the federal government.

The analysis also shows that fraud is the main offense associated with virtual currency ATMs, “followed by human trafficking for sexual exploitation, and cybercrimes”.

Cryptocurrency ATMs: almost a million dollars in fines last year

With the meteoric increase in the number of cryptocurrency ATMs, the number of fines distributed by Revenu Québec to companies operating them has literally exploded.

For the moment, the government does not distinguish between a conventional ATM and a machine where you can buy cryptocurrencies, such as the famous “bitcoins”.

But while these counters are increasingly present in small businesses – there were around 250 two years ago, and there are now more than 350 – the number of fines distributed by Revenu Québec to service companies monetary prices literally exploded.

For approximately the same number of inspections (1,380), the number of convictions increased from 9 to 64 between 2022-2023 and 2023-2024, increasing the total fines from $217,250 to $904,358, an increase dramatic 258%.

For the current year, Revenu Québec is in the process of distributing even more fines. As of June 30, there were already 36 convictions for fines totaling $594,783.

Rules of the game

For now, cryptocurrency ATM operators are subject to the same rules as others.

Like everyone else, they are required to disclose information to the tax authorities, in particular with regard to the directors, officers and partners of the company, and also with regard to some of their lenders. They must also meet requirements regarding the verification of the identity of their customers.

“Failure to comply with these obligations or an infraction of other provisions set out in the Money Services Business Act may result in fines, or even the suspension or revocation of the permit,” specifies Revenu Québec.

Under federal law, companies that operate cryptocurrency ATMs must also report “suspicious transactions” (for example: large transactions, small transactions occurring frequently at multiple ATMs, transactions made while talking on the phone).

Prudence

For its part, the Financial Markets Authority emphasizes that it has also noted an increase in calls denouncing situations of potential fraud, and also from people who have invested in cryptoassets and who are unable to recover their money.

“Fraudsters are taking advantage of the craze for cryptoassets to resort to classic schemes such as false transaction platforms, fraudulent yield offers which involve educational seminars, schemes to manipulate the price of cryptoassets,” recalled the holder -spokesperson for the organization, Sylvain Théberge.

The five main cryptocurrency ATM operators in Quebec

Localcoin (Toronto): 139 ATMs

Instacoin (Laval): 81 counters

Bitcoin deposit (Atlanta): 41 counters

Coinstation (Mont-Royal): 22 counters

Coinflip (Toronto): 22 wickets

Source: coinatmradar.com

How does it work to buy Bitcoins?

1– A person buys a Bitcoin on a platform

2– A computer solves a mathematical equation to create a block

3– Once the solution is obtained, the block appears in the blockchain

4– Bitcoin is deposited in an electronic wallet

5– You can pick up pieces at the counter

Four risks associated with cryptos

1– Volatility risk

2– Liquidity risk

3– Technological and operational risk

4– Risk of participation in criminal, terrorist, fraudulent or money laundering activities

Source: Financial Markets Authority

– With the collaboration of Sylvain Larocque