Anti-Money Laundering
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Dealers in Virtual Currency

Background

Currently, digital currencies such as Bitcoin (BTC) and Litecoin (LTC) are not recognized as being “currency” as defined by Canadian regulators. While this means dealers in virtual currencies are not reporting entities under current Canadian anti-money laundering (AML) and counter terrorist financing (CTF) legislation, Canadian federal Bill C-31, passed in 2014 and draft regulations published in June 2018, stipulated that “dealers in virtual currency” may be considered money services businesses (MSBs).

While this legislation has not yet been enacted, we recommend that digital currency dealers and exchanges use the standards that apply to Money Services Businesses (MSBs) in Canada as the guidelines on which to base their AML programs and identification standards.  In some cases, digital currency dealers and exchanges may be considered to be MSBs now (if they also carry on activities that would cause them to be captured in this category).

MSBs that operate in Canada are subject to Canadian anti-money laundering (AML) and counter terrorist financing (CTF) requirements.  The Canadian regulator is the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).  MSBs that do business in Québec are also regulated by the The Autorité des marchés financiers (AMF).  The AMF is the body mandated by the government of Québec to regulate the province’s financial markets.  While digital currency dealers and exchanges that are not considered MSBs would not be able to register with the regulators, other elements of AML compliance can be applied.

Additionally, as an organization that collects personal information (PI), The Office of the Privacy Commissioner of Canada will govern your practices regarding personal information. Industry members may also be subject to additional provincial level requirements, depending on where you’re doing business.

How Outlier Can Help

Outlier can design plain language AML and CTF compliance program components to help you meet your obligations.  The documentation that we create is intended to work with your existing compliance regime and business practices.

In all of our engagements, we look for ways to streamline your existing practices and empower business, while mitigating your regulatory risk.  Our consultants have completed work for both provincially and federally regulated financial services companies that includes:

We also offer customized training packages that incorporate your practices including specialized training for:

If you have been contacted by a regulator and require immediate assistance, please contact us.


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