Police in Vancouver Calls for Digital Currency Enforcement Laws
The Vancouver Police Department (VPD) has cautioned Canada’s government that cryptocurrencies are progressively being utilized by organized crime for money laundering.
The VDP warns that checks and balances are important to screen the digital coins. It is pushing for the implementation of changes that would require crypto-related transactions to be reported to the Financial Transactions and Reports Analysis Center of Canada, FINTRAC.
Police in Metro Vancouver saw a 350% increment in filings related to cryptocurrencies from 2016 to 2017. As of January, this year, the office examined 70 records, figuring a potential for 800 cases before the end of year — a 300% more than 2017.
In view of these discoveries, police are becoming concerned that criminals — both local and afar — will exploit the potential anonymity linked with digital monetary forms, particularly for money laundering.
The report noted that due to absence of regulations in Canada, services that offer cryptocurrencies such as Bitcoin ATMs do not at the moment pace restrictions on the funds that can be exchanged between individuals.
“Given this lack of regulation, it is likely that Canadian organized criminals will use Bitcoin ATMs to launder their cash. However, we will likely also see foreign organized crime taking advantage of the lack of regulations,” the report read. “Any forward-thinking criminals will be exploring cryptocurrency and ATMs as an easier and more profitable alternative,” the VDP said.
As per Coin ATM Radar, there are 63 Bitcoin ATMs in Metro Vancouver. Since many are owned by small, autonomous merchants, police are concerned that they don’t run Anti Money Laundering (AML) and Know Your Customer (KYC) confirmations, which require the gathering of individual data from clients, for example, officially sanctioned picture IDs and birth dates, the report continued.
The report went further to shed light on a VPD-written resolution to be brought before the Canadian Association of Police Governance. The resolution requests for the execution of government revisions made to legislative Bill C-31, which passed in 2014 but is not being enforced.
Bill C-31 revised the nation’s crime and terrorist financing act to incorporate controls and regulations for digital monetary standards. The bill requires any organization wishing to transmit or change over digital monetary forms to enlist with FINTRAC, Canada’s finance monitoring unit
The report concludes that “The lack of regulatory framework allows criminal groups to explore a myriad of ways that they can exploit Bitcoin ATMs and exchanges,” the report read. “They can commit fraud, launder money and turn Canada into a haven for international criminal funds. Implementing the cryptocurrency provisions from Bill C-31 would not eliminate these problems. However, they would restrict them at their source and severely limit their ability to flourish.”