Canada will be requiring crypto exchange platforms to legally register with the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC). The country is expecting exchange firms to comply with the new regulation by June 1, 2020.
A recently published noticed revealed that this requirement will become effective next year alongside other amendments made to the country’s Anti-Money Laundering (AML) legislation.
There have also been talks indicating that crypto exchange firms will be mandated to follow Know Your Customer guidelines and report any dubious transactions to the country’s financial watchdog. This also entails keeping detailed records of their customers and hiring compliance officers for their system.
A Globe and Mail report revealed that compliance with these procedures have so far been voluntary, but several exchanges have opted to follow.
Canadian Banks to Accept and Cooperate with Crypto Exchanges
The impetus behind the administration of the new regulations is reportedly aimed at getting Canadian banks to accept and cooperate with crypto exchanges.
Lori Stein, a partner at the Osler, Hoskin & Harcourt Law Firm, said that Canada’s financial institutions have always been wary about the risk of terrorist funding and money laundering that might happen through crypto exchange platforms.
Stein added that the government is hoping that banks and other financial groups will be more amenable to offering services to and dealing with digital services firms now that crypto exchanges are required to register and will be monitored by FinTRAC.
Stein also emphasized that some international platforms might not be open to following Canada’s rule. Several crypto experts also noted that the mandated registration could lead to the currency exchanges leaving the Canadian market.