The Financial Transactions and Report Analysis Center of Canada(FinTRAC) released a report on 10 July, revealing financial regulations that the Canadian government has planned, for 2020.
According to the report, cryptocurrency exchanges will be entailed to register with the Financial Transactions and Report Analysis Center of Canada, in order to restrain money laundering activities in the country, starting June 2020. This latest move by the agency would also require cryptocurrency exchanges to abide by Know Your Customer(KYC) policies, in order to validate the identities of the users and also verify transactions. A Compliance Officer will also be appointed to watch out for fraudulent activities.
The Globe and Mail reported that this move is to persuade banks in Canada to collaborate with cryptocurrency exchanges in order to prevent money laundering and terrorist financing activities. The news agency also observed that cryptocurrency exchanges were always compliant to these policies, however, some exchanges abstained from it.
Lori Stein, a partner at Canadian business law firm, Osler, Hoskin & Harcourt suggested that banks have always expressed concern over cryptocurrency exchanges paving the way for money laundering and terrorist financing activities. Stein said,
“The hope is that now that there is going to be a requirement to register and comply, and oversight by FinTRAC, that banks and other financial entities are going to be more open to providing services to and dealing with virtual-currency businesses.”
However, Stein alerted that the latest move might fend off cryptocurrency exchanges that aren’t willing to abide by the rules and also avert potential cryptocurrency exchanges.
Moe Adham, the CEO of blockchain based company Bitaccess had something similar to say. He stated,
“I expect to see a number of firms relocate outside of Canada, as well as international firms limiting access to Canadians.”
Whereas, Coinsquare, Canadian cryptocurrency exchange company suggested that Canada has been one of the most crypto tolerant countries. Coinsquare said,
“Regulatory policies such as these will not only ruin the image but also prevent customers from doing business with the exchange. Customers who do not want to reveal their information to exchanges would likely just transact with each other directly.”