Canada Releases New Regulations on Cryptocurrencies
Canada strengthens crypto regulation
Cryptocurrencies face many challenges concerning its operations across the world. Among them are governments’ take on how they want crypto exchange platforms to operate within their borders.
One such government is Canada. It has released a draft on regulations aimed at controlling how cryptocurrencies operate is the Canadian country. The department of finance on behalf of the government released new Crypto regulations. Particularly, they focus on Know Your Customer (KYC) / Anti-Money Laundering (AML). According to the finance department, the new regulations will help in the fight against money laundering. Similarly, the new regulations will help improve Canadian’s Anti-Money Laundering and Anti-Terrorist Financing Regime (AML/ATF).
The new regulations on cryptocurrencies
Canada’s Financial Action Task Force (FATF) did an inquiry into the state of the cryptocurrencies industry in the country. As a result, they found a number of deficiencies that needed address. Through this, Canada’s financial department derived the laws in question. They will therefore treat payment processors and crypto exchange platforms in the country as money service businesses (MSB). Under MSB, crypto industry players will be required to report transactions that go beyond 7700 US dollars translating to 10,000 Canadian dollars. Moreover, the new regulations come in with a new KYC threshold at 770 US dollars which is $1,000 CAD. Over and above, the new regulations come with a cost-benefit analysis. It shows that the regulations would cost 47 million USD which translates to 61 million CAD in the next 10-years.
However, regulations usually face negative reactions from industry players. Canada’s new crypto regulation is no exception to this. Mr. Francis Pouliot, one of the co-founders of Catallaxy, a blockchain consulting firm based in Montreal, is against the new regulations. While expressing his view concerning the new Canadian crypto regulation, he tweeted.
“I object to the new law requiring cypto exchange platforms to ask and keep details of all large virtual currency transactions amounting to $10,000. This new requirement under the new regulations will be difficult to implement”
Even though the department of finance insists that the new laws are aimed at elevating Canada’s fight against money laundering, it’s likely other industry players will come out to oppose them.