Canada Cracks Down on Crypto – Here’s What It means for You

For a few days now, a lot of focus has been put on demonstrations taking place on the Canada-US border, against COVID-19 measures. The social, political, and economic impact of this event are substantial, but it is also of great concern for those that are using cryptocurrencies - and here’s why.

In order to clamp down on these protests, the government invoked exceptional legislation that has an impact on crypto providers. since authorities are trying to crack down on different means of funding these demonstrations. Should you be worried, if you buy and sell crypto on a regular basis?

protests in Canada

Tensions at the Canada-US border

Although tensions have eased and border crossings re-opened recently, protests continue to stand their ground there, as well as in Ottawa. Generally, protestors are showing their objection to vaccine restrictions, and this event has already been called the Freedom Convoy, since it was initiated by truck drivers, who wanted to continue their cross-border journeys without getting vaccinated. Protestors have been arrested but as tensions persist, there is increasing pressure on Prime Minister Justin Trudeau to take decisive actions.

Compared to the US, pandemic-related restrictions are stricter in Canada, and while other countries in the world are gradually easing restrictions albeit a high daily case rate, Canadians are frustrated by the lack of government flexibility when it comes to dealing with the virus.
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Canadian PM invokes the Emergency Act

Canadian PM Trudeau invoked the country’s Emergencies Act, a move that allows the government to take extraordinary measures to stop the protests. Experts at Coinrise explain exactly how this influences cryptocurrency trade and exchange.

Based on the Act, crowdfunding platforms and payment services providers, including those that are using cryptocurrencies, must register with the Financial Transactions and Reports Analysis Center of Canada (FINTRAC).

Chrystia Freeland, current Canadian Finance Minister, spoke on the matter, highlighting that the government wants to expand anti-money laundering and terrorist financing rules:

“These changes cover all forms of transactions including digital assets such as cryptocurrencies. The illegal blockades have highlighted the fact that crowdfunding platforms and some of the payment service providers they use are not fully captured under the Proceeds of Crime and Terrorist Financing Act.“

Given that not all crypto-related activity is linked to money laundering, the question remaining is what the alternatives to getting involved in the digital assets space are, without being impacted by the Emergency Act.

crypto regulation in Canada

How can crypto traders protect themselves?

Cryptocurrency trading using derivatives is the answer, and thanks to the work done by brands such as Coinrise, which provides services all over Canada excluding the province of Saskatchewan, and covers a wide range of crypto-related instruments.

By buying and selling these assets, people can base their trades on derivatives that track the underlying asset price movement rather than the crypto itself. Regulatory crackdown, thus, becomes irrelevant. Volatility remains elevated in the field, which means a high number of potential trade opportunities.

The tensions at the Canada-US border and the latest regulatory crackdown in Canada might not have an influence on the global crypto markets, but they are certainly impacting residents in the country, even those who are not involved in the protests.

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