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The government of Canada has updated its Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) rules, CoinDesk reported.
The amendments, which were finalized last month, target cryptocurrency exchanges operating in the country, among other things. The objective of these amendments is to address and close the gaps that exist in Canada’s AML/ATF Regime.
According to the details, money service businesses (MSBs) will now include both domestic and foreign businesses that are “dealing in virtual currency.” These include virtual currency exchange services and value transfer services.
The term “virtual currency” is defined as “a digital representation of value that can be used for payment or investment purposes that is not a fiat currency and that can be readily exchanged for funds or for another virtual currency that can be readily exchanged for funds,” or “a private key of a cryptographic system that enables a person or entity to have access to a digital representation of value.”
“As required of all MSBs, persons and entities dealing in virtual currencies would need to fulfill all obligations, including implementing a full compliance program and registering with FINTRAC [Financial Transactions and Reports Analysis Centre of Canada]. In addition, any reporting entity in any sector that receives C$10,000 or more in virtual currency (e.g. receiving deposits, any form of payment) would have record keeping, identification and reporting obligations,” the notice reads.
Cryptocurrency exchanges operating in the country would be required to register with FINTRAC as of June 2020, Cointelegraph reported.
The government further clarified that these amendments will help mitigate the money laundering and terrorist activity financing risks associated with virtual currency, while ensuring there is no impediment to innovation.
“For this reason, the amendments are targeted at persons or entities engaged in the business of dealing in virtual currencies, and not virtual currencies themselves,” it added.
On June 13, Finance Minister Bill Morneau and Minister of Border Security and Organized Crime Reduction Bill Blair met with a number of provincial and territorial counterparts to discuss new and continuing approaches to stop financial crimes in Canada. The ministers agreed on “working cross-government on anti-money laundering best practices, and reporting back to Ministers by January 2020,” among other measures.
