This amendment would help improve regularizations and controls regarding the fight against money laundering in Canada.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is preparing a special plan to regulate the use of cryptocurrencies in that country. This would be a previous phase to modify and implement new actions to monitor how people are using these crypto assets.

This happens when the time set by the Financial Action Task Force (FATF) to adapt crypto-regulatory bodies is about to expire. For this reason, the country is now working on new laws and tools to achieve the goal.

As the first step, FINTRAC will increase controls regarding crypto. It will monitor startup companies that target this market. Then, it will also monitor all transactions made with cryptocurrencies and other related operations. Some press reports detailed that these modifications will come into effect from June of this year.

The agency highlights that this will be a reform to broaden the scope of action of the Canadian authorities, something that they consider a priority. The company added that these modifications come directly from the state legislature.

“One of the main priorities in the short term will be the application of the new regulations that come from the recent legislative changes”, FINTRAC explains.

Control All the Crypto-Operations

This reform of the law will grant FINTRAC the power to control all actions conducted with cryptocurrencies in Canada. This includes the transfer of funds from abroad to people in Canada and vice versa. Besides, this law will optimize government controls to combat money laundering, electronic crime, and terrorist financing.

After the implementation of this new reform, all companies that handle an approximate of 10,000 Canadian dollars (USD 7,000) in cryptocurrencies will have to register their operations with FINTRAC.  This is what the developers of the project explained to local media.

In this way, the companies must agree to strict controls that FINTRAC will impose on those movements executed with digital currencies. This would be for the authorities a form to prevent money laundering.

The law will also require the companies to record all movements with cryptocurrencies that exceed 1,000 Canadian dollars (700 USD). Therefore, these companies must have a history of movements, as well as the personal data of those who make the crypto-transaction.

Other Control Measures

Some sources linked to the project detailed that the data required for the registration of the person who executes the transactions range from the year of birth to the room address, and telephone numbers.

It is important to highlight that the regulatory body may require more documentation if it is an amount greater than Canadian dollars 10,000 (USD 7,000). This would be necessary to validate the operations.

Those who do not meet these requirements or the necessary documentation could commit “minor” infractions, according to what a part of the amendment explains.

These legislative reforms are the product of an extensive evaluation that the FATF started some years ago. The agency’s evaluation concluded that Canadian laws were weak in money laundering, terrorist financing, and electronic crimes that may be related to cryptocurrencies.

Taking into consideration the FATF’s suggestions, the entity in charge of monitoring these FINTRAC operations highlighted that they now have good “expectations” regarding these technologies. “The overall legislative and policy framework must serve Canada’s interest while remaining in harmony with international expectations”.

According to other reports, some countries are also working hard on the legal framework that helps regulate and control the use of cryptocurrencies. To achieve this goal, they are taking into account FATF’s suggestions and the deadline imposed by the agency.

By María Rodríguez


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