Canada passes a law that classifies cryptocurrencies as Money Service Businesses
As Money Service Businesses, cryptocurrencies will now need to report all transactions exceeding $10,000 Canadian Dollars
Today marks the implementation of Canada’s Proceeds of Crime (Money Laundering) And Terrorist Financing Act that was passed in June 2019. The bill was devised with the aim to address problems in the previous legal framework.
The new law states that Canadian crypto firms must now report all transactions that exceed $10,000 CAD ($7,403 USD). They must also register and comply with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
The new regulations have been welcomed in the local industry. Francis Pouliot, the CEO of Canadian crypto-asset exchange BullBitcoin, expressed his relief in a tweet.
Today is my last day as an unregulated dealer in virtual currency. As of June 1st 2020, Bitcoin exchanges and payment processors are officially regulated as Money Services Businesses in Canada.
Full circle 7 years after I started my career in Bitcoin lobbying on this very issue.
— Frλ͎ncis ☣️ (bullbitcoin.com) (@francispouliot_) May 31, 2020
Pouliot has spent more than five years working towards the recognition and legitimacy of cryptocurrencies in the country. He was the Director of Public Affairs for the Bitcoin Foundation Canada. Pouliot has collaborated closely with FINTRAC and the Ministry of Finance throughout the process.
“Bitcoin is money. It should be regulated like other money, no more no less.” he said.
The new regulations will mostly affect cash-based businesses such as Bitcoin-based ATM operators.
“Most Bitcoin businesses already had KYC measures in place because they were required to do so by their banking or payment processing partners.”
The parliament of Canada’s original plan was to pass this resolution in 2014. However, Pouliot explained that the delay was because they had to agree and negotiate the specific activities that have been covered, as well as the technicalities of regulation.
Twitter user @NODEfather, in response to Pouliot’s post, tweeted that he had been sent to prison over an unlicensed money transmission.
“I went to prison for selling 9.998 BTC for $9, 260.80 USD in 2014, Unlicensed Money Transmission, which used the Banking Secrecy Act 1970 a 50+ year old law applied to #Bitcoin.”
Canada has invested significantly in cryptocurrency throughout the years, with the Canada Energy Regulator reporting in February that mining cryptocurrency is a popular activity in the country.
Madrolle noted that while the implementation of the law may take some time and have a slightly negative impact on some businesses, in the long run she believes that “it would not hinder the growth of cryptocurrency usage.”