The new regulatory measures could stop the operations of some crypto-exchanges companies in that country
According to a notice published on July 10th, the Canadian government will force crypto-exchanges companies operating in the country to be registered with the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC), with a deadline of up to June 1st, 2020. This would give these companies a legality status in the country.
This requirement is due to a series of measures taken in conjunction with the amendment to the law against money laundering recently approved in Canada. This change will come into force next year.
In addition to registering in the country’s financial control system, cryptocurrency exchange companies must comply with the “Know Your Customer” policy, an alternative to the financial system that requires companies to have information about their customers. This also allows monitoring user’s financial movements.
In this way, crypto-exchanges companies that will operate in Canada must report to FINTRAC the transactions that may be suspicious of an economic crime. This means that those companies must have a detailed record of each client, as well as assign an officer in charge of compliance.
According to media reports in this sector, they indicate that compliance with these measures has been voluntary. Hence crypto-exchanges companies have adopted these measures in the same way. This is due to the constant search for the banking sector to collaborate actively with its companies and to be able to operate jointly.
The lawyer and partner of the Canadian business law firm Osler, Hoskin & Harcourt, Lori Stein, says that all financial institutions in Canada have been very concerned about what cryptocurrencies may mean for terrorist organizations that seek money laundering and accumulate methods for financing attacks.
In this sense, Stein hopes that now that these companies should be subject to the measures dictated by the financial control sector, now they can operate with more security and can achieve negotiations with banks.
“What we expect is that now that there is going to be a registration and compliance requirement, supervision by FinTRAC, banks and other financial entities are more open to providing services and dealing with virtual currency companies”, she said.
In spite of describing this measure as positive, Stein also affirmed that this measure can also be counterproductive, assuming that not all the crypto-exchanges companies that operate in the territory will be willing to adhere to these regulations of law. This would be a reason for these stop operating in Canada.
Stein’s latest statements may be the product of the assertions of Moe Adham, Founder and CEO at Bitaccess, who objected to the measure commenting that she expected to see exchange companies leaving the Canadian territory. “I hope to see a number of companies relocate outside Canada, as well as international companies that limit access to Canadians”, Adham commented.
These new regulatory policies in Canada could be a reason for many of the companies operating in the country to cease their operations and many others to stop taking the country into account as a territory to expand their business.
By María Rodríguez