Canada’s Government Urges For Cryptocurrency Regulation, Amid Concerns About Money Laundering
Every country around the world is figuring out how to handle cryptocurrency, though a mutual fear among many of these nations is how to protect their citizens from becoming a cyber-attack statistic. The Canadian House Finance Committee is the latest authority in a string of changes to recommend that the government take an active role in crypto regulation. Based on local digital newspaper iPolitics, their main concern is to prevent money laundering.
In the publication, the committee made their determination after their review of the Proceeds of Crime Money Laundering and Terrorist Financing Act (PCMLTFA). The Act requires a review every five years. For this review, which began in February there were 18 separate meetings. This review made it possible for them to determine three ways that the government can make a difference in their regulation.
The first of the three recommendations are that the process of moving from fiat to cryptocurrency should be controlled. They would also define these types of platforms for the exchange as a money-service business. This follows the regulation that is already drafted, which was released on June 9th this year. The draft notes that both crypto exchanges and payment processors would have this title. Canada already has decided that these types of businesses have to comply with the rules of the PCMLTFA and have to abide by certain guidelines in financial reporting.
The second recommendation is that cryptocurrency exchanges will have to obtain a license to function within Canada’s borders, which is much like what New York requires with their BitLicense process. Some of the suggestions involved in the report come from financial adviser IJW & Co. and law firm Durand Morisseau LLP.
The testimony from this entity in the report said,
“Cryptocurrency transactions may be used by parties to swiftly move large amounts of wealth across borders, and that regulating (exchanges of fiat currencies for cryptocurrencies) would address the (anti-money-laundering) concerns of the cryptocurrency space.”
The final recommendation from the Committee is to regulate the crypto wallets of users as well. This recommendation is not expanded upon much, but the government is required to take some sort of action to respond to the Committee’s assessment within 120 days.
Recently, CoinTelegraph reported on the Financial Action Task Force’s (FATF’s) cryptocurrency guidelines. They were recently amended to work on protecting the market from being overtaken by money laundering and terrorism financing.