Canada’s Crypto KYC/AML Regulations Released, Money Service Businesses Guidelines
Canada Releases Draft About Cryptocurrency Regulations Related On KYC And AML
More countries are starting to define their positions on virtual currencies and crypto-related services. This time, the Canadian government has released a draft that informs its stance towards cryptocurrency exchanges and payment processors. The information has been released by Canada Gazette on June the 9th.
Canada’s New Cryptocurrency Exchange Regulations
As reported by the media outlet, these new regulations aim to tackle a ‘number of deficiencies’ that have been recognized by the Financial Action Task Force (FATF) after their initial evaluation between 2015, and 2016. The intention is to strengthen Canada’s Anti-Money Laundering and Anti-Terrorist Financing laws – which are very related to virtual currency exchanges.
Crypto platforms, including trading platforms and payment processors, will be considered as money service businesses (MSB). In this way, they will have to report large transactions over $10,000 CAD ($7,700 USD). Moreover, they will have to setup a new KYC threshold at transactions of $1,000 CAD ($770 USD).
At the same time, the draft shows that there will be a benefit by implementing these regulations of $61 CAD in the next ten years.
Some important business figures in the country, including Francis Pouliot, co-founder of the blockchain consulting firm Catallaxy, are already against this draft. He argues that the new requirements would be very difficult to implement for companies.
“New requirement: ‘Large Virtual Currency Transaction Record’ means businesses required to ask for and keep details of every transaction over $10,000 like large-cash transaction reports,” he said. “That’s going to be extremely difficult and invasive to implement. I will object to this.”
The FATF regulations are non binding for countries, but those who apply this rules are considered by companies all over the world as legally compliant countries, with a stronger institutional framework.
It is important to mention that in March, during the G-20 financial summit in Buenos Aires, the group suggested to follow FATF standards on the crypto market. Canada is already working on it, just at the same time that the G-7 summit took place in Québec.