FINTRAC to Enforce Stricter Rules for Crypto Companies to Comply with FATF’s Regulations

The Canadian financial crimes watchdog is making preparations for the implementation of its new powers on virtual currency oversight before the June 2020 deadline set by the Financial Action Task Force (FATF).

This means the Financial Transaction and Reports Analysis Centre of Canada (FINTRAC) is going to be more strict when it comes to regulating companies that use virtual currency, also the activities and transactions taking place after June 1, when the new rules will start to take effect. Here’s what a FINTRAC report from early March reads:

“A major priority in the near term will be the implementation of new regulations arising from recent legislative change.”

Sweeping Powers Are an Amendment to Criminal Finance Framework

The sweeping powers are an amendment to the Canadian criminal finance report and passed in June 2019. They’re expected to enhance the AML/ATF regime in the country, says the FINTRAC. FINTRAC is for Canada what the Financial Crimes Enforcement Network (FinCEN) is for the US.

Canadian companies registered as money services businesses and that have at least $10,000 CAD in crypto will have to comply with the new regulations and provide documentation for their crypto transactions of more than $1,000 CAD, in some cases. This information will include the names, addresses, birth dates and phone numbers of the sender and the receiver of transactions. The transactions of $10,000 CAD or above will require even more documentation. The amendments classify the violations of regulations as minor infractions.

FINTRAC Responds to FATF’s 2015-2016 Assessment

Canada imposes new amendments of virtual currencies after the FATF made in 2015 – 2016 an assessment of its AML and CFT frameworks and deemed them as deficient. Being a FATF member, the country should meet some specific thresholds. In its report from March, the FINTRAC said Canada’s interests should be served by the legislative and policy framework while international expectations are being met. Other countries are also hurrying to comply with FATF’s demands until the June deadline.

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Author: Oana Ularu

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