Cryptocurrency firms now recognized as money service businesses in Canada

From today onwards, Canadian firms operating with virtual currencies will be legally recognized as Money Service Businesses.

Cryptocurrency exchanges and payment processors are now legally recognized as Money Service Businesses (MSB) within Canada.

June 1 saw the enactment of amendments to Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act that were passed in June 2019 to address holes in the then-existing framework.

Candian crypto firms must now report all transactions exceeding 10,000 Canadian dollars ($7,403), and register and comply with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

Recognition brings relief

On May 29, the CEO of Canadian crypto asset exchange BullBitcoin, Francis Pouliot, tweeted:

“Today is my last day as an unregulated dealer in virtual currency. As of June 1, 2020, Bitcoin exchanges and payment processors are officially regulated as Money Services Businesses in Canada.”

Pouliot had spent over half a decade fighting for legitimate recognition for Canada’s crypto sector, having joined the Bitcoin Foundation Canada as its director of public affairs in 2014. 

“I've been closely involved with the process, starting in 2014, collaborating particularly with the Ministry of Finance and FINTRAC. Our stance never changed: Bitcoin is money, it should be regulated like other money, no more no less,” he added.

Pouliot notes that the new regulations will predominantly affect cash-based businesses such as Bitcoin ATM operators, adding that “most Bitcoin businesses already had KYC measures in place [...] because they were required to do so by their banking or payment processing partners.”

MSB recognition follows five years of negotiations

Pouliot describes the protracted political negotiations that led to last year’s legislative amendment, stating that Canada’s parliament had originally decided to pass the regulations in 2014.

“It took five years to agree/negotiate what specific activities are covered and the technicalities of regulation,” he added.

In response to Pouliot’s tweets, Twitter user "NODEfather" wrote, “I went to prison for selling 9.998 BTC for $9,260.80 USD in 2014, Unlicensed Money Transmission, which used the Banking Secrecy Act 1970 a 50+ year old law applied to #Bitcoin.”