Canada’s parliament has passed a new bill, amending the “Proceeds of Crime (Money Laundering) and Terrorist Financing Act” to now include digital and virtual currencies.
The new adjustments made to the act, originally enacted in 2000, means firms dealing in such digital currencies are now recognized as ‘money services businesses’, and are obligated to record keeping, reporting of suspicious transactions, verification procedures, and are required to register in front of the government.
BTC dealers and exchanges are now forced to register with FINTRAC (Financial Transactions and Reports Analysis Centre) and instill AML compliance procedures in the workplace. Banks and other financial institutions are banned from working with companies which are not registered with FINTRAC.
The new laws do not only comply with only Canadian based companies, such as exchanges, dealers, and BTC ATM operators, but also companies dealing in Bitcoin to the Canadian market, outside the country.
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“Part of the concern with such laws is whether they strike a balance between combating financial crime and supporting innovative technology development. The concern is that venture capital for Bitcoin start-ups may dry up if legislative obligations prove to be too onerous or expensive,” said Christine Duhaime, senior financial crime advisor at consultancy MNP.
While government intervention may contradict with the basic premise of digital currencies like Bitcoin, regulation and compliance may pave the way for a larger adoption rate, given the government overseeing operations as it would with conventional currencies.
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