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Canadian crypto exchanges must register with FinTRAC

Canadian crypto exchanges must register with FinTRAC

July 11, 2019 AtoZ MarketsAccording 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.

Canadian crypto exchanges on the FinTRAC radar

The Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) as a federal institution and financial intelligence unit, facilitates the detection, prevention, and deterrence of money laundering and the financing of terrorist activities while ensuring the protection of personal information under its control. 

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 report any suspicious transactions to the FinTRAC, 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” that the Canadian Financial Action Task Force (FATF) had filtered out 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 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 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 requirement 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, as well as international firms could limit access to Canadians.

Some crypto experts also assumed the new regulatory policies may also drive crypto exchange customers away.

Think we missed something? Let us know in the comments section below.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ, nor should they be attributed to AtoZMarkets.

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