Virtual Currency Companies to be Regulated in Canada

All cryptocurrency companies, both those within Canada and those outside the country that are dealing with Canadian customers are to be officially regulated by Money Service Business (MSBs). Companies that deal with cryptocurrencies are to follow these regulations and also register with Canada’s Financial Intelligence Unit (FINTRAC). MBS are those domestic or foreign businesses that are dealing with virtual currency- this would include cryptocurrency exchange services and cryptocurrency transfers.

The amendment also stated that all MSBs involved with virtual currencies must fulfill all obligations stated which includes registration with the FINTRAC.

The Outcome

Francis Pouliot, the CEO and founder of Canada Crypto Company Bull Bitcoin served as the crypto advocate at the local Bitcoin Embassy, has confirmed the regulation and has also stated that it’s not all that bad and considers this development a huge success.

Today is my last day as an unregulated dealer in virtual currency. As of June 1st 2020, Bitcoin exchanges and payment processors are officially regulated as Money Services Businesses in Canada.

Full circle 7 years after I started my career in Bitcoin lobbying on this very issue.

— FRANCIS – BULLBITCOIN.COM (@francispouliot_) May 31, 2020

Pouliot explained that it took 5 years for negotiations and agreement to be met on what special activities could be considered under this regulation. This is because Bitcoin was added to the list of Canada’s Proceed of Money Laundering and Terrorist Financing Act back in 2014.

The decision to add Bitcoin businesses to Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act was made by Parliament in 2014 as part of Bill C-31 but it took 5 years to agree/negotiate what specific activities are covered and the technicalities of regulation- Pouliot

Pouliot went on to say it’s not a decisive win because the amendment states that any virtual company or individuals that receive up to $10,000 Canadian dollars or more in cryptocurrency should have a record-keeping, identification and reporting obligations hence forth.

The main thing that prevents me from calling this a decisive victory is the requirement to report all transactions over $10,000 threshold, which applies also to physical cash but doesn't apply to bank transactions. I feel guilty for not fighting this discrimination hard enough.

— FRANCIS – BULLBITCOIN.COM (@francispouliot_) May 31, 2020

Pouliot pointed out that this is not applicable to bank transactions and this makes it discriminating.

Most cryptocurrency companies in canada are already complying with this directives even placing a tight Know Your customer (KYC) in their systems for their customers, this will help them become accountable if any case of money laundering is found within this exchange.

Pouliot believes the amendment or law would aso affect cryptocurrencies businesses that are involved with cash- like the ATMs etc.