March 29, 2023

FINTRAC tightens digital asset regulation

Financial Operations Analysis and Reporting Center of Canada (FINTRAC) will present updated rules on the regulation of digital currencies to counter money laundering.

According to the rules, which will enter into force on June 12020, exchanges will be required to review their KYC policies. FINTRAC proposes to tighten supervision over the activities of cryptocurrency companies and strengthen control over transactions with digital assets. Companies with a turnover of more than CAD 10,000 will be required to register as a cash operator.

When making a transaction in excess of 1,000Canadian dollars, such companies will need to provide the name of the sender and recipient of the funds, their addresses, date of birth, contact phone number and the name of the cryptocurrency in which the transaction was made. As for transactions with larger amounts, the regulator will require an extended list of information.

FINTRAC believes that the rules issued by the Groupthe development of financial anti-money laundering measures (FATF) in relation to AML and CFT procedures are not strict enough, therefore, it is necessary to establish a new “threshold” for firms working with digital assets. At the same time, according to the regulator, the updated regulatory requirements should act not only in the interests of Canada, but also in other jurisdictions.

Recall that in January of this year, the AdministratorsCanadian Securities Authority (CSA) published a guide according to which Canadian exchanges will be subject to national securities laws if they work with crypto assets representing securities or derivatives.