FINTRAC tightens digital asset regulation

Financial Transactions and Reporting Analysis Center of Canada (FINTRAC) will provide updated rules onthe regulation of digital currencies to counter money laundering.

According to the rules that will come into force on June 12020, exchanges will be required to review their policies for completing the KYC procedure. 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 C$10,000 will be required to register as a money handler.

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 GroupFinancial Anti-Money Laundering Task Force (FATF) developments around AML and CFT procedures are not stringent enough, so a new “threshold” needs to be established for firms dealing 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 of other jurisdictions.

Let us remind you that in January of this year, AdministratorsThe Canadian Securities Exchange (CSA) has published guidance that Canadian exchanges will be subject to national securities laws if they deal in crypto assets that are securities or derivatives.

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