Our neighbors to the north have appropriated the dubious claim of “first country to regulate fake currencies,” with hopes that others will follow their frozen lead when adopting their own bit-loony money launder laws. Assign responsibility accordingly when something inevitably goes wrong.
The provision of a budget law, which received royal assent last week, amended the country’s anti-money laundering and counter-terrorist financing laws to, among other things, regulate virtual currencies. It makes digital currencies subject to the same reporting requirements as other money-services businesses….
“Canada approving a national Bitcoin law as a matter of anti-money laundering law should not be discounted,” she wrote. “It is important not only because it may be the first Bitcoin national law but also because most countries may now follow suit because of their membership in the Financial Action Task Force….”
In addition to the money services business treatment, digital-currency exchanges will have to register with the Financial Transactions and Reports Analysis Centre of Canada, or Fintrac. With that registration comes requirements to report suspicious transactions, keep certain records, implement compliance programs and determine if any of their customers are politically exposed people. And the law is extraterritorial: It captures foreign companies that have a place of business in Canada and those directing services at Canadians.
Canada Enacts Bitcoin Regulations [WSJ Risk & Compliance Journal]