Cryptocurrency trade should be in compliance with the anti-terrorist financing (ATF) and anti-money laundering (AML) regulations according to Canada’s lower house Finance committee. The committee leader Malpeque MP Wayne Easter, asserts that, Cryptocurrency exchanges should be considered as money services businesses (MSBs) for easy regulation.
Canada is among the countries that have allowed Crypto firms to operate as they establish the best way to regulate the sector. The country’s Crypto sector has experienced tremendous growth recently.
A New Crypto Law Proposed In Canada
Cryptocurrency trade in Canada will soon be in compliance with anti-terrorist financing (ATF) and anti-money laundering (AML) regulations if the proposal by a country’s lower house committee sails through. According to the Finance committee leader Malpeque MP Wayne Easter, Cryptocurrency exchanges operating in the country should be categorized as money service businesses (MSBs) when involved in activities such as exchanging the virtual currencies for fiat.
The committee report elaborated that once the exchanges are categorized as MSBs, it will require all those involved in the sector to be in compliant with AML/ATF regulations. Furthermore, it would also require the involved persons or entities to register with Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The move would help the authorities to track Cryptocurrency activities in the country for different reasons.
The Move To Help In Tracking Illegal Activities
Despite the increasing popularity of Cryptocurrency transactions in Canada and beyond, it has become increasingly difficult for the authorities to screen most of these activities. There are fears that Cryptocurrencies could be used in illegal activities.
The committee said that the proposed regulation would require Cryptocurrency wallet holders to provide their identity on demand.
The committee said that it would now become easy for the authorities to ensure that they track Crypto activities are properly and ensure they comply with the AML regulations. The new law will also help in taxation as it will enable the authorities to track those who do not report their capital gains from the sector.
Witness Testimony Shows Laxity In Complying With AML/TF Regulation
The committee has said that there is limited use of AML/TF requirements in the country based on witness testimony. According to the committee, real estate is one of the worst affected sectors where the lawyers and real estate agents rarely check their customers against sanctions list.
Furthermore, the committee noted that the country lacks a readily accessible list of ML/TF bad actors. The Finance committee observed that although Global Affairs Canada provides such a list, it is of little use to the AML requirements.
The committee also said that although there are low chances that virtual currencies are used in money laundering. However, we cannot underrate their use in the payment of illegal and criminal activities. A few months ago, the UK’s Treasury committee released a similar report about the use of the virtual currencies in criminal activities.
Recently, the number of Crypto firms in the country has been increasing tremendously in Canada. The country’s Crypto-friendly policy has played a major role in not only boosting the influx of firms but also increased use of the virtual currencies.
Cryptocurrency miners are greatly attracted to Canada mainly because of the reliable and affordable power supply.