Canadaâ€™s Crypto Exchanges Must Now Register as MSBs, Report Transactions Over $10K
Canada has updated its anti-money laundering rules, making changes that will affect cryptocurrency exchange operations in the country.
The Canadian government published the amendmentsÂ to theÂ Proceeds of Crime (Money Laundering) and Terrorist Financing Act in theÂ Canada Gazette on Wednesday.
While the changes to the financial rules â€“Â finalized late last month â€“ cover a number of perceived gaps within traditional finance, they also notably set the bar higher for platforms â€œdealing in virtual currency.â€�Â The government explained that such activities include â€œvirtual currency exchange services and value transfer services.â€�
The rules now class both Canadian and foreign crypto platforms as money servicing businesses (MSBs), which must â€œfulfill all obligations, including implementing a full compliance program and registering with FINTRAC [the Financial Transactions and Reports Analysis Centre of Canada].â€�
Further, any â€œreporting entityâ€� across all sectors that receives CA$10,000 (US$7,667) or over in cryptocurrency â€“ such as deposits received or in payment â€“ must record details of the transaction, identify the sender and report the transaction.
The government said:
â€œThese amendments serve to mitigate the money laundering and terrorist activity financing vulnerabilities of virtual currency in a way that is consistent with the existing legal framework, while not unduly hindering innovation. For this reason, the amendments are targeted at persons or entities engaged in the business of dealing in virtual currencies, and not virtual currencies themselves.â€�
The news comes months after Canadian crypto exchangeÂ QuadrigaCX shocked the country and made global headlines after its founder and CEO Gerald Cotten died late last year, apparently without passing on access to the companyâ€™s cryptocurrency wallets.
In March, CanadianÂ financial regulators said they wereÂ considering putting in place rules for cryptocurrency exchanges, which at the time had no scheme for official recognition or authorization.
Canadian parliament image via Shutterstock