Canadian crypto exchanges must register with FinTRAC

According to the official newspaper of the Government of Canada notice local crypto exchanges will be required to register with the Financial Transactions and Reports Analysis Centre (FinTRAC) as of June 1, 2020.

The article was updated on 15 November, 2019 by Amicus.

11 July, 2019 AtoZ Markets – The Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) is a federal institution and financial intelligence unit. It facilitates the detection, prevention, and deterrence of money laundering and the financing of terrorist activities. It ensures the protection of personal information under its control. 

Canadian crypto exchanges on the FinTRAC radar

This Canadian financial authority works with its anti-money laundering and anti-terrorism financing regime partners at the federal, provincial, and municipal levels.

According to the press release, the new requirement for Canadian crypto exchanges will come into effect along with other amendments to the country’s new Anti-Money Laundering (AML) laws next year.

In addition, the country’s crypto trading platforms will also reportedly be required to observe Know Your Customer policies. And it has to report any suspicious transactions to the FinTRAC. However, it has to keep records of their clients and hire a compliance officer for their platform. 

Canada to create an efficient regulatory framework for the crypto industry

As per local media, up until now, compliance with FinTRAC policies has been voluntary. But some Canadian crypto exchanges have chosen to do so anyway.

As Atoz Markets reported earlier, in June 2018, the government of Canada issued an official draft of new regulations on cryptocurrency exchanges and payment processors.

Back then, the new regulations were aiming to address a “number of deficiencies”. The Canadian Financial Action Task Force (FATF) had filtered out that. It is to fit with Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime (AML/ATF).

A year later, the Quebec province financial regulator in Canada, Régie de l’énergie,  issued a new band of regulations pertinent to cryptocurrency miners.

What made FinTRAC take such initiative? 

The motivation for implementing the new policies regarding Canadian crypto exchanges is reportedly to encourage local banks. That is to collaborate with cryptocurrency exchanges.

Lori Stein, a partner at business law firm Osler, Hoskin & Harcourt, believes, that Canadian financial institutions have historically been concerned about the risk of money laundering and terrorist financing via crypto exchanges.

She expressed her hope, that after a new policy introduction. "Banks and other financial entities are going to be more open to providing services to and dealing with virtual-currency businesses.”

Stein also pointed out that some international exchanges may not be willing to comply with the new FinTRAC rules.  Thus, some experts admit, that mandatory regulatory requirements could encourage crypto exchanges to leave the Canadian marketplace.

The CEO of blockchain startup Bitaccess, Moe Adham also believes, that a number of firms might relocate outside of Canada. Also, international firms could limit access to Canadians. Some crypto experts also assumed the new regulatory policies might also drive crypto exchange customers away.

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