Peterson McVicar Blog

January 2023 Edition

New Canadian and Foreign Cryptocurrency Exchanges Registration Requirements

Following amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019, effective June 1, 2020, Canada’s Finance Department requires that all Canadian and foreign cryptocurrency exchanges register with the Financial Transactions and Reports Analysis Centre of Canada (“FinTRAC”) and implement a full compliance program, as the definition of Money Service Bureaus will be expanded to include domestic and foreign businesses that are ‘dealing in virtual currency’ – virtual or cryptocurrency exchange services and value transfer services. 

Exchanges will also be required to observe ‘Know Your Customer’ policies and report any suspicious transactions to FinTRAC: entities receiving $10,000 or more in cryptocurrency in deposit or any form of payment, would have to meet record keeping, identification, and reporting obligations.

According to the Finance Department, the goal of these amendments is to close the gaps which exist in Canada’s Anti-Money Laundering and Terrorist Financing Regime by addressing the inherent vulnerabilities in cryptocurrencies. These amendments have been targeted not at cryptocurrencies themselves but at the entities engaged in the business of dealing in cryptocurrencies, so as to not unduly hinder innovation while still coinciding with the existing legal framework.