19 March, 2020 | AtoZ Markets – The Financial Transactions and Reports Analysis Center of Canada (FINTRAC) has announced that it will soon implement new anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. FINTRAC will begin more stringent regulation of virtual currency businesses, transactions and activities. The new rules will come into effect on June 1.
Canada Tightens Crypto Regulations Alongside AML/CTF
"A major priority in the near term will be the implementation of new regulations arising from recent legislative changes." It has given FINTRAC new oversight of the virtual currency space, the agency said in the report.
Passed as an amendment last June, these expanded powers should help put in place an "improved AML/ATF Regime in Canada, FINTRAC said in his report. FINTRAC is the Canadian counterpart to the Financial Crimes Enforcement Network (FinCEN) in the United States.
In the report, FINTRAC highlights the challenges arising from the adoption of new technologies such as cryptocurrency. While most of the changes resulting from new technologies are gradual in nature, "many are revolutionary" in their impact.
The updated legislative framework will include new reporting requirements for virtual currency transactions. It is expanding FINTRAC's regulatory mandate to further cover the operations of foreign-based businesses that use cryptocurrencies.
Canada's financial regulator plans to undertake "substantial national stakeholder consultations and a rigorous implementation phase". FINTRAC adds that it hopes to work with industry representatives to consider adjustments to the new framework.
Read More: Two Canadians Sentenced to US Prison for Bitcoin Fraud
New Reporting Requirements for Crypto Companies
The new regulations require crypto companies to record and report a large number of identifying information of the customers whose transactions they process.
Companies with the crypto activity of 10,000 CAD register as a money services business, which is subject to new regulations. Businesses must also document the name, address, date of birth, telephone number, and type of crypto transactions greater than CAD 1,000 and above. More extensive documentation requirements apply to transactions of CAD 10,000 or more.
The virtual currency amendments were Canada's response to the FATF's blistering assessment of its 2015-16 AML and CFT frameworks. As a member of the FATF, Canada should reach certain thresholds.
FINTRAC alluded to this "expectation" in its March report. It stated that "the overall legislative and political framework must serve Canada's interests while remaining consistent with international expectations".
Other countries and exchanges are also working quickly to get online before the June FATF deadline.
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