Alongside the other amendments in Canadian new laws against the money laundering (AML), this north country will introduce more rules for crypto exchanges until the next year. According to the sources, cryptocurrency exchanges in Canada will be legally required to register with a financial watchdog, the Financial Transactions, and also with the Reports Analysis Centre of Canada (FinTRAC). Reportedly, such a bill was signed up back in 2014, to obligate some former entities to registration with FinTRAC when trading with BTC.
Registration with Canadian watchdog and ‘Know Your Customer’ policy
Cryptocurrency exchanges will also be obliged to follow Know Your Customer policies in their business operations and to report any suspicious transactions to the Canadian financial watchdog; this also entails keeping reports of their clients and hiring a compliance officer for their platforms.
In the same report from July 10, it was noted that until now, compliance with these policies was exclusively voluntary, but many exchanges have decided to keep with it. The impulse for completing the new policies is reportedly to get Canadian banks onboard and in collaboration with cryptocurrency exchanges.
Lori Stain about the following required registrations
Lori Stein, who is a business partner at the law firm Osler, Hoskin & Harcourt, made the historical instance on Canadian financial institutions that have been worried about the risk of money laundering and terrorist financing via crypto exchanges in the past.
Stain also added they share the hope that now after the exchanges are required to register and comply with the Canadian watchdog, and oversight by FinTRAC, that banks and other financial entities are going to be more open for collaboration with crypto industry and willing to providing services to and dealing with virtual-currency businesses.
Still, some international exchanges may not be willing to comply with the new Canadian watchdog rules. The other opinion is more positive with this decision, saying that having necessary regulatory requirements could appear in cryptocurrency exchanges opting to exit from the Canadian marketplace.
A new regulatory policy may drive away customers
Moe Adham, The CEO of blockchain startup Bitaccess reviled his point of view about new direction Canadian regulators are going to. He expects to see a lot of firms relocate outside of Canada in the future, but also international firms restricting access to Canadians companies.
The new regulatory policies may also scare away crypto exchange customers. A requirement to apply with financial watchdog has the potential to push cryptocurrency underground again, said Coinsquare’s AML officer, Charlene Cieslik. From this Canadian exchange also pointed out that clients who do not want to reveal their information would likely just negotiate with each other directly.