With cryptocurrency use on the rise, particularly in Canada, the Canadian government has plans to strengthen their cryptocurrency regulations, along with anti-money laundering (AML) and terrorist financing regulations. In 2014, the government approved amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTF) which would require any entities dealing with cryptocurrencies to register with the federal financial intelligence unit (FINTRAC) and implement an AML compliance program. In addition, banks will not be permitted to conduct business with any entities not registered with FINTRAC. While the amendments are not in effect yet, the Canadian government is looking to update and add to these regulations once again.
A recent hearing held just this week, discussed the new cryptocurrency regulations that will be released to the public after they are published by the Canada Gazette. A final report will also be drawn up of all the recommended updates to the PCMLTF for the House of Commons. However, a cryptocurrency expert raised concerns regarding the potential for increased regulation of cryptocurrencies to hinder future innovation.
Jonathan Hamel, founder of L’Académie Bitcoin was invited to speak on behalf of the cryptocurrency sector and advocated for the 2014 amendments as being sufficient for preventing money laundering. He stated that “”Bitcoin itself is not regulated, but the peripheral actors you use as a customer to enter or exit the network are licensed as money service businesses, so they’re required to register all transactions.” Hamel used various examples of regulations impeding innovation like the strict regulations in China which forced market leaders, OkCoin and Huobi, to create sites Okex and Huobi Pro which use only cryptocurrency and have halted mining operations that played a large part in the global market.
On the other hand, Pierre-Luc Dusseault, MP of Sherbrooke, Quebec expressed his approval of the blockchain industry, given that Bitfarms, a cryptocurrency mining company, has plans in place to invest $250 million into a Sherbrooke computing facility in his constituency. While the Canadian Senate stated in 2015 that they support “light touch” regulation of Bitcoin and other cryptocurrencies, due to the ever growing industry, more regulations are being added. Companies looking to turn Canada into a cryptocurrency global center must also work to comply with these new regulations.
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