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With amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) in June 2019 came several changes to Canada’s Anti-Money Laundering (AML) Regulations. Among these changes were the clarifications around the definitions for virtual currency, cryptocurrency businesses or dealers in virtual currency that are subject to the PCMLTFA and its associated Regulations (“the Regulations”).
A cryptocurrency business or dealers in virtual currency would be subject to the Regulations if it offers any of the following virtual currencies services:
Businesses offering such services would include virtual currency exchanges, brokerages, and virtual currency automated teller machines.
Businesses offering such services would include custodians that hold customers’ private keys on their behalf, such as wallet providers.
Cryptocurrency businesses exempted from the Regulations include blockchain developers, cryptocurrency mining companies which provide computational power for transactions or blockchain companies providing technical support to the reporting entities.
MNP’s AML advisors can help determine whether your cryptocurrency business falls under the AML regulations or is exempt from the regulations.
June 1, 2020, every cryptocurrency business or dealer in virtual currency operating in Canada or providing services targeted to the Canadian market will be officially regarded as a money services business (MSB). These must register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and comply with the PCMLTFA and its associated Regulations going forward.
Specifically, cryptocurrency businesses subject to the Regulations must fulfill the following obligations:
The AML compliance program must include the following five elements:
At a minimum, the AML policy manual must include procedures for:
Failure to comply with these legislative requirements can result in administrative fines up to $100,000 per violation for individuals and up to $500,000 per violation for companies.
As Canada’s federal AML regulator and financial intelligence unit, FINTRAC has the legislative authority to issue and publish administrative monetary penalties where instances of non-compliance are identified.
MNP’s dedicated AML professionals have developed and assessed the effectiveness of hundreds of AML compliance programs for MSBs, payment service providers, financial technology businesses and other FINTRAC reporting entities to the satisfaction of the regulators and financial service partners.
We can help you:
For more information, contact any of the following advisors in MNP’s Forensics and Litigation Support Services:
Corey Anne-Bloom, CPA, CA, CA.IFA, CFE, CFF
Eastern Canada Leader, Forensics and Litigation Support
Lisa Majeau-Gordon, CPA, CA.IFA, CFE, CFI, CFF
National Leader, Forensics
Brian Tario, CFI
Partner, Forensics and Litigation Support
Rob Fowlie, CPA, CA, CFE, IFA
Toronto Practice Leader, Forensics and Litigation Support
Claudius Otegbade, CFE, CFCS, CFI, CBP
Senior Consultant, Forensics and Litigation Support
Mondiu Jaiyesimi, BSc., MSc., CAMS, CBP
Consultant, Forensics and Litigation Support
Related Topics:FINTRAC; Financial Reporting; Legislation
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