On July 10, 2019, changes to Canada’s federal anti-money laundering legislation which affect those in the cryptocurrency space were published in the Canada Gazette:
The portion of the changes which affect ‘dealers’ in virtual currency come into effect June 1, 2020. These changes will impact cryptocurrency exchanges, bitcoin ATM proprietors and digital wallet service providers, who will all have to register as money service businesses with FINTRAC come the effective date.
There is a ton to unpack here, and I will be revisiting the changes in greater detail in the coming weeks. For now, please note that if you are a ‘dealer in virtual currency’, you should be thinking (now!) about:
(1) Appointing a chief compliance officer (and perhaps a deputy CCO!) for your organization.
(2) Adopting written anti-money laundering policies and procedures which reflect your company’s system of complying (and identifying non-compliance) with the amended regulations.
(3) How you intend to abide by the new regulations — which include requirements to identify customers and record details of your customer transactions, and report to FINTRAC (large cash transactions, electronic fund transfers, suspicious or terrorist property).
(4) Assessing risk — each money service business must conduct risk assessment for money laundering and terrorist financing transactions, and will have to examine and identify its customer base, examine the types of relationships it has with customers and what processes are in place to control or decrease exposure to money laundering risks.
(5) How you intend to actually follow through with the implementation of your policies and procedures. Having a great policy is one thing, but it is meaningless if you don’t apply it to your business. Money service businesses are expected to regularly update their policies and adopt such things as regular employee training programs.
(6) Asking for help — Sometimes engaging a professional is the best way to get clarity on new legislation and to help ensure compliance with that new legislation.