Money laundering is a massive global problem estimated at 2-5% of global GDP (up to $2 trillion annually). In response to the situation, regulatory authorities worldwide are developing stringent laws to curb the menace; however, in hindsight, the regulations may present a significant challenge for legitimate FinTechs looking to scale their operations.
In this article, we examine why Canada has become a strategic launchpad for FinTech and crypto founders, and how executive teams can leverage AML Incubator to mitigate regulatory friction, accelerate market entry, and scale confidently globally.
Why AML compliance defines the next phase of FinTech and crypto growth
For founders and executive teams, AML compliance is no longer a legal afterthought—it has become a defining factor in whether a FinTech or crypto company can bank, raise capital, and scale internationally. In 2025 alone, the FATF rewrote Recommendation 16, the EU’s new AML Authority (AMLA) began direct supervision, and the U.S. Corporate Transparency Act finally took effect.
The cost of getting compliance wrong is no longer theoretical; it is a tangible reality. For leadership teams, enforcement actions may translate directly into frozen operations, loss of partners, delayed expansion, and long-term reputational damage.
The EU AMLA, for instance, dictated higher fines for repeat offenders. In Canada, Cryptomus, a cryptocurrency payment gateway, was fined C$177 million for failing to report suspicious transactions and ignoring transactions related to Iran.
These developments raise the need for strong compliance foundations among financial institutions.
Canada’s emerging position as a global launchpad for FinTech and crypto
Canada is showing strong interest from venture capital and private equity investors. In 2024, a record total of US$9.5 billion was invested in Canadian FinTechs. In the first half of 2025, US$2.4 billion was invested in the same space.
The country’s legal certainty, faster registration, and transparent law are primary enablers for regulated global FinTech and crypto companies. The country was among the first G7 countries to recognize crypto dealers and exchanges as Money Service Businesses (MSBs), offering legal clarity from an early stage.
From a founder’s perspective, Canada’s biggest advantage is regulatory simplicity: a single federal AML registration enables national operations, faster banking relationships, and a more straightforward path to international expansion.
Once registered, executive teams can benefit from a predictable compliance framework, which reduces uncertainty, avoids fragmented provincial oversight, and minimizes delays that often stall early-stage growth.
With the registration, companies can operate freely across all provinces in the country.
FinTechs involved in the payments industry can also register under the Retail Payment Activities Act (RPAA) to access additional risk frameworks and oversight from the Bank of Canada.
Canada is also a country committed to startup growth with programs that support:
- Scientific research and development through tax credits and grants
- Visa and immigration pathways for tech talent
The country also boasts a receptive population with 98% access to financial services, as well as strong adoption of artificial intelligence and regulatory technology.
Understanding AML compliance requirements in Canada
The Money Services Business (MSB) framework
For founders, being classified as a Money Service Business (MSB) determines how quickly the company can launch, which banking partners it can access, and how investors assess regulatory risk. Organizations classified under this bracket include currency exchange providers, crypto exchanges, check-cashing services, brokers, and remittance companies.
FINTRAC oversight provides something investors and banking partners value highly: regulatory legitimacy. For leadership teams, this translates into easier onboarding with financial institutions and stronger long-term credibility. Regulatory oversight promotes financial integrity, prevents economic destabilization, and safeguards reputational damage, thereby fostering investor trust.
Full overview of MSB categories
For executive teams, understanding MSB categories is less about operational details and more about ensuring proper classification from the outset—misclassification can delay launch, trigger remediation, or expose founders to enforcement action.
Foreign exchange dealing
Foreign exchange dealing involves the exchange of a national currency for another, such as the exchange of the United States dollar for the Canadian dollar. These businesses must comply with AML requirements, which include reporting suspicious transactions to authorities.
Money remittance
These are businesses that facilitate domestic or international fund transfers. Think of companies like Western Union. Money remittance also covers credit or debit card payments when the beneficiary has an agreement with the payment service provider (PSP) that allows card-based payments for goods or services.
Virtual currency dealers
Canada has long identified virtual currencies, such as cryptocurrency dealers, as MSBs. The highly anonymous nature of cryptocurrencies makes them a target for fraudsters; therefore, they must comply with enhanced AML requirements, including transaction monitoring and reporting.
Cheque cashing
You are an MSB if you cash cheques for clients in exchange for funds without necessarily requiring a bank account. Operators are required to perform customer verification checks and maintain transaction records.
Armoured car activities
These are businesses involved in the transportation of negotiable instruments, such as currency, money orders, or travelers’ checks.
Crowdfunding platforms
Crowdfunding platforms raise money by getting funds or virtual currency for a cause from a large number of people. The use of the funds can vary, including funding for education, healthcare, or animal welfare. Businesses leverage crowdfunding platforms to raise funds and connect with potential investors.
Payment processing /merchant settlement
These are businesses that issue or sell money orders, traveler’s checks, or other payment instruments. Regulatory requirements include maintaining transaction logs, customer due diligence (CDD), and adhering to AML regulations.
Additional Regime: Retail Payment Activities Act (RPAA)
FINTRAC and the Bank of Canada (BoC) are two regulators in Canada that regulate MSB activity. While FINTRAC acts as the AML watchdog, BoC acts as the payments regulator. Actions classified as payment actions include:
- Holding funds
- Initiating payments
- Authorizing payments
- Clearing or settling retail payments
- Providing payment interfaces
For founders operating payment products, RPAA registration has a direct impact on operational resilience. Failure to meet governance and safeguarding expectations can result in remediation orders, service interruptions, or forced pauses in growth.
RPAA requirements elevate risk ownership to the executive level, making early access to experienced risk leadership critical for uninterrupted operations.
Many FinTechs fall under both regimes; for instance, a crypto exchange or remittance app is an MSB under FINTRAC for AML rules and a payment service provider (PSP) under RPAA for their payment functions.
The core problem: Compliance complexity slowing innovation
Navigating regulatory compliance for any business can be a daunting task. Regulators require compliance from the outset, and without the proper expertise, this can result in wastage of valuable company resources that would otherwise be used to advance the business.
1.Cost of in-house compliance teams
For early-stage companies, hiring full-time compliance executives can add significant fixed costs before revenue stabilizes—forcing founders to choose between growth and regulatory coverage. Outsourcing helps eliminate the need for full-time compliance hires at a fraction of the cost.
2. Fragmented global regulatory requirements
Regulatory frameworks vary across borders; in many instances, the requirements can be inconsistent or conflicting for the same activity. In practice, companies are forced to navigate these murky waters, a process that can be complex.
3. Difficulty scaling AML frameworks across markets
Scaling startups into global brands carries the risk of non-compliance as evolving legal requirements become increasingly complex. Keeping track of changing regulations while expanding to new markets can be difficult. Proper scaling requires adaptability, which can be challenging to achieve with in-house teams.
4. Crypto-specific pain points
Multiple countries are still developing proper crypto regulations, without which companies operate in a regulatory grey area. A cryptocurrency exchange company could receive unfair treatment when classified alongside traditional platforms. Countries like Canada provide a safe launchpad with clear definitions on how virtual asset providers or exchanges should operate.
5. Consequences of inadequate compliance architecture
Non-compliance due to inadequate compliance architecture, such as improper hiring or compliance software, risks hefty fines, legal actions, and reputational harm. Inadequate compliance also leads to unfair market competition, often against large corporations.
AML Incubator’s enabling role in compliance
Many FinTechs, MSBs, PSPs, and VASPs outsource their compliance needs to AML Incubator (AMLI). AMLI is a Canadian-based fractional compliance outsourcing firm that simplifies regulatory needs for businesses worldwide. AMLI offers executive teams a strategic advantage through:
1.RPAA registration support
RPAA is a framework established under the Canadian Payments Act requiring the Bank of Canada to supervise PSPs. The bank oversees them to ensure that they demonstrate financial transparency and have strong transaction security measures. Non-adherence would result in fines, legal actions, and reputational harm.
AML Incubator allows executive teams to meet RPAA requirements. This involves application, representation in Canada, risk assessment, incident response, and all accompanying documentation. They also offer fractional CRO leadership services, a position critical for BoC compliance.
2. AML program development and fractional leadership
Fractional leadership is a growing trend in which companies opt to outsource executives for a fraction of their time, typically to address rising costs, economic uncertainty, and the need for specialized expertise. AMLI embeds experienced AML and risk leadership into growing companies, giving founders institutional-grade compliance without long-term executive overhead.
The positions include: Chief Anti-Money Laundering Officer (CAMLO) and Money Laundering Reporting Officer (MLRO), who establish and manage global frameworks aligned with FINTRAC, the Financial Action Task Force (FATF), the Financial Crimes Enforcement Network (FinCEN), and the Australian Transaction Reports and Analysis Centre (AUSTRAC).
Other positions include Chief Financial Officer (CFO), tailored to your product, and Chief Risk Officer (CRO), as required by RPAA for all payment service providers.
3. AML effectiveness reviews (External third-party audits)
FINTRAC requires that all MSBs conduct AML effectiveness reviews every two years. While audits are a regulatory requirement, they also help organizations strengthen internal controls, identify compliance gaps, reduce penalty risks, and enhance operational efficiency. AMLI works with organizations to ensure compliance by evaluating their AML programs, which include policies, procedures, risk assessments, and training measures.
4. Regulatory remediation and gap analysis
Think of regulatory remediation as a course correction for your business’s compliance shortcomings. AMLI identifies and addresses gaps where your organization falls short of meeting legal and industry standards. It is about identifying problems and implementing solutions. AMLI key remediation services include compliance assessment, corrective action, training, and regular monitoring and reporting.
5. Enhanced Due Diligence (EDD) and Token Due Diligence
AMLI collaborates with clients to screen high-risk customers and transactions, protecting them against financial crimes and regulatory violations. The process involves risk assessments, customer screening, compliance training and support, as well as the reporting and submission of regulatory reports.
They also offer token due diligence services, evaluating whether a crypto project is legitimate, secure, and compliant with regulatory standards. They also conduct team audits to assess the reputation of project owners and creators, as well as their governance models.
6. Global Licensing for FinTech and Crypto Companies
Canada offers federal AML regulations; therefore, on compliance, global FinTechs, including virtual asset providers, can operate in all its provinces while integrating with the local financial infrastructure. AMLI also offers Virtual Assets Regulatory Authority (VARA) registration services, enabling crypto companies to operate in Dubai. Compliance also sets the stage for expansion into other North American and G7 countries such as Japan, France, Germany, the United States, and the United Kingdom.
By serving as the trusted compliance partner, AMLI helps these businesses accelerate their time-to-market.
AMLI’s strategic enablement layer
AMLI Academy: Training and workforce upskilling
In the business world, where the rules and regulations evolve regularly, staying relevant and compliant is crucial. This necessity highlights two key components of professional development: training and certification. In Canada, training is not just a formality; it is a legal requirement under PCMLTFA and FINTRAC guidelines.
AMLI Academy offers training courses for professionals seeking AML certification in Canada. Learning expectations include:
- Understanding Canada’s AML frameworks
- Practical sector-specific knowledge
- How to strengthen internal AML frameworks
AMLI Labs: Equity-based support for high-potential startups
AMLI Labs is an AML compliance solution for startups without upfront capital; instead, AMLI negotiates for an equity stake based on the support provided. At these early stages, AMLI offers tailored support, including legal, AML, and operational infrastructure.
Technology and ecosystem partnerships
AML Incubator is a trusted global brand backed by experienced professionals and proven systems. According to available data online, it has a pool of over 50 global clients with more than 20 years of combined experience in the anti-money laundering sector. Technological and ecosystem partners include Sumsub, Zenoo, KYC Aid, AML Watcher, Sardine, Utila, and 21 Analytics, among others.
8 reasons crypto founders, FinTechs, and MSB leaders choose AML Incubator
- AMLI prepares startups to enter the market quickly with the tools to navigate the dynamic regulatory environment at minimal cost.
- Cost-efficient operational setup through fractional leadership services, enabling companies to focus on growth and innovation.
- Compliance frameworks with implementation guidelines tailored for growth and evolving regulations, reducing the chance of falling behind due to outdated processes.
- All-round compliance coverage from consultation services, training, onboarding, auditing, and compliance report submissions as required by regulators.
- Crypto-native expertise assuring you of thorough insights on token credibility, governance, and financial stability, shielding you from deceitful crypto projects.
- Enhanced due diligence and audits to evaluate the credibility and risks associated with your organization, ensuring adherence to financial regulations and minimizing exposure to fraud.
- AMLI AML frameworks are aligned with FINTRAC, FINCEN, ADGM, VARA, and AUSTRAC, offering a pathway for global licensing.
- AMLI’s commitment to compliance ensures that your company is protected from fines, legal actions, and reputational harm resulting from non-compliance.
Conclusion: Building safer, scalable, and globally compliant digital finance ecosystems
At the most basic level, operational compliance ensures that your organization adheres to regulations. Non-compliance can be costly in terms of both financial and reputational consequences.
In practice, maintaining an in-house compliance team is difficult due to the level of expertise required and associated costs; therefore, outsourcing compliance to a firm like AMLI becomes a more effective route.
AMLI has successfully served clients, addressing compliance challenges in the areas of cryptocurrency, securities, and multi-jurisdictional licensing. The firm stands out for its dynamic infrastructure, tailored to individual risk profiles, and flexible systems that adapt to new consumer demands or regulations.
For any FinTech or cryptocurrency platform looking to leverage Canada’s strategic positioning as an ideal launchpad, they can connect with the AMLI team through their official channels:
Source: https://www.cryptopolitan.com/canada-fintech-launchpad-aml-incubators-role/
