Payment processors and crypto exchanges now have legal standing as Money Service Businesses in Canada. After close to five years of negotiations, the Government of Canada passed amendments to the Proceeds of Crime and Terrorist Financing Act a year ago, which went into effect on June 1, 2020.
These recently enacted amendments hope to stamp out money laundering by plugging the cracks in previous legislation. According to the law, cryptocurrency firms in Canada are legally required to report all transactions of $10,000 (CAD) or more. This amounts to approximately $7,390 at press time. In addition, firms must abide by FINTRAC, which is the Financial Transactions and Reports Analysis Centre of Canada.
Commemorating the legislation, BullBitcoin CEO Francis Pouliot tweeted last week that “Today is my last day as an unregulated dealer in virtual currency. As of June 1, 2020, Bitcoin exchanges and payment processors are officially regulated as Money Services Businesses in Canada.”
Francis Pouliot has been a major proponent for cryptocurrencies in Canada, having spent more than five years advocating for the legitimacy of blockchain assets. Pouliot became the Director of Public Affairs for the Bitcoin Foundation Canada in 2014.
Pouliot noted, “I’ve been closely involved with the process, starting in 2014, collaborating particularly with the Ministry of Finance and FINTRAC. Our stance never changed: Bitcoin is money, it should be regulated like other money, no more no less.”
Canada’s regulatory changes will largely affect cryptocurrency business that deal with cash, such as Bitcoin ATMs. The overwhelming majority of Bitcoin exchange that are based in Canada were previously required to adhere to so-called “know you customer” regulations, either to eliminate fraud or to meet the need s of their banking partners.
The news is welcome by most Canadians, especially after QuadrigaCX ceased operations last year. The company, which was the nation’s biggest cryptocurrency exchange at the time, turned out to be run by a single developer, who died a mysterious death. Users lost $190 million overnight.