Canada’s department of finance has issued a regulatory impact analysis statement about proposed amendments to the country’s AML/ATF regime. The statement wants Canadian crypto exchanges to be treated as money service businesses (MSBs) and they should report trades over a certain amount.
According to the proposed amendments, as published in the Canada Gazette, “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. These ‘dealing in’ activities include virtual currency exchange services and value transfer services. As required of all MSBs, persons, and entities dealing in virtual currencies would need to implement a full compliance program and register with FINTRAC. In addition, all reporting entities that receive $10,000 or more in virtual currency (e.g. deposits, any form of payment) would have record-keeping and reporting obligations.”
Exchanges won’t have problems complying with the part about registering with FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada). Some Canadian exchanges have decided to register voluntarily, just to remedy regulatory uncertainty, as it was reported previously. The government has concluded that compliance with the proposed rules will cost just $270,112 for a ten year period.
The statement also says that the changes will not be implemented to provide greater clarity to traders and the exchanges who asked for it. They will rather be to “close loopholes” and address deficiencies in compliance with the standards set by the Financial Action Taskforce (FATF). Financial Action Taskforce is the inter-governmental body that sets international benchmarks on combating money laundering and terrorist financing.