Canada Releases Official Draft of New Crypto Regulations Focused on KYC/AML

The Canadian government has released an official

draft of new regulations on crypto exchanges and

payment processors, Canada Gazette reports June 9.

According to the draft, the new regulations seek to address

a “number of deficiencies” that the Financial Action

Task Force (FATF) outlined after their evaluation in 2015-16,

namely in strengthening Canada’s Anti-Money Laundering and

Anti-Terrorist Financing Regime (AML/ATF).

The new regulations will treat crypto exchanges and payment

processors as money service businesses (MSB),

which requires them to report large transactions —

those over $10,000 Canadian dollars ($7700 USD) —

and a new Know Your Customer (KYC) threshold set at transactions of $1000 CAD ($770 USD).

The draft also contains a cost-benefit analysis,

which reveals the regulations would cost about

$61 CAD mln ($47 mln USD) over the next 10 years.

Francis Pouliot, co-founder of Montreal-based blockchain

consulting firm Catallaxy, tweeted his response to the draft:

“New requirement: "Large Virtual Currency Transaction Record"

means businesses required to ask for and keep details

of every transaction over $10,000, like large-cash transaction reports.

That's going to be extremely difficult and invasive to implement. I will object to this.”

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