As scammers and terrorists increasingly turn to crypto, a Canadian intelligence office is raising alarms about risks posed by an emerging industry offering discreet means to convert cryptocurrency to large sums of physical cash and vice versa.

A substantial portion of these services across Canada are being “heavily exploited for illicit purposes” and are “knowingly facilitating money laundering, sanctions evasion” and a variety of “transnational organized crime activities,” according to a Canadian intelligence memo reviewed by the International Consortium of Investigative Journalists.

The memo’s assessment shows top financial intelligence officials echoing a concern that some crypto experts have voiced with…