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The Bank of Canada has permitted XTM Inc., the Toronto-based financial technology firm at the centre of complaints about millions of dollars’ worth of missing restaurant tips, to resume payment activities under the supervision of a court-appointed monitor.
The central bank said on Friday that the Ontario Superior Court has issued an order commencing proceedings under the Companies’ Creditors Arrangement Act regarding XTM.
The order follows reports from clients of Everyday Payments, a platform that restaurants use to distribute gratuities to their staff, who allege that money has gone missing from their digital wallets. XTM co-owns the platform with Edmonton-based Everyday People Financial Corp.
Ian Tostenson, president and chief executive officer of the British Columbia Restaurant and Foodservices Association, said he’s calculated at least $10-million in losses after speaking with some 40 or 50 restaurants in B.C. and Alberta. Restaurants in Ontario and Nova Scotia have also reported issues.
Former exec of fintech linked to missing restaurant tips alleges CEO was ‘misleading users’
Last month, the Bank of Canada issued a temporary order barring XTM from performing any payment activities, saying it had “serious concerns” that the fintech had “failed to safeguard client funds in its possession,” leading to a significant shortfall.
Employers using Everyday Payments prefund their digital wallets by sending money to the platform, where it is to be held in a custodial account as restricted cash. Employees can then cash out the tips they’ve earned by transferring money from the employer’s wallet onto a prepaid card.
However, XTM’s auditor noted in a May, 2025, report that the company had used “restricted cash funds” for “its operating and program management,” and that “a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern.”
In its financial statements for the three-month period ended Sept. 30, 2025, XTM reported a “trust deficit” of roughly $18.75-million.
The Bank of Canada began supervising payment service providers last September, when its powers came into force under the Retail Payment Activities Act.
Missing $10-million in restaurant tips exposes gaps in rules for payment platforms
In the temporary order, dated Feb. 27, Anne Butler, managing director of supervision, says she is satisfied that based on the terms of the CCAA order that the Everyday Payments platform can be operated in compliance with the law and in the public interest under “the oversight of the Court and the appointed Monitor.” She did not specify who the monitor is.
The temporary order, which lasts for at least 30 days, sets out specific conditions, stating, for instance, that the fintech can only perform retail payment activities “to the extent necessary” to allow other parties to operate the platform.
The company is also prohibited from directing any transactions or withdrawals from any trust accounts associated with the platform.
XTM did not immediately respond to a request for comment.