Canada Crackdown – The Canadian government just announced[1] that going forward it will regulate any businesses “dealing in virtual currency” as Money Services Businesses (MSBs). This move is aimed at protecting Canada’s financial ecosystem from potential terrorist financing activities and money laundering.
Canada considers money service businesses as those that handle money, but are not ‘official’ chartered banks; such as money transfer services and foreign exchange services.
“Persons and entities that are “dealing in virtual currency” would be financial entities or other entities deemed domestic or foreign MSBs, as the case may be. As required of all MSBs, persons, and entities dealing in virtual currencies would need to implement a full compliance program and register with FINTRAC.”
Under FINTRAC (Financial Transactions and Reports Analysis Centre of Canada), these companies are required to have a complete Know Your Client (KYC) and Anti-Money Laundering (AML) policies, procedures, and reporting. These businesses are also required to report any suspicious activity on their platform, immediately.
The Canadian government believes that these new amendments prevent money laundering and terrorist activities, while not holding back potential innovation. If these new amendments are fully accepted, they will come into effect exactly 12 months after their registration – no need to panic.
Crypto Regulation Front-Runner
According to IMF analysis, Canada is known as one of the most financially stable nations[4] in the world. The country avoided major bank shutdown during the Great Recession of 2008, in the U.S. Much of this stability was from tight regulations and strict reporting for MSBs and chartered banks.
Just recently, a number of Canadian banks followed suit of the U.S.
