Late last week, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) published a regulatory scheme for Money Services Businesses (MSBs) that work with bitcoin and other virtual currencies. The specifics are being discussed, but it’s believed that it won’t become fully instituted until sometime next year.
The federal agency released the official publication in which it stated that modifications to the list of rules that help in fighting money laundering and terrorism financing, otherwise known as Proceeds of Crime and Terrorism Financing Act, “will aim to cover entities such as virtual currency exchanges, not individuals or businesses that use virtual currencies for buying and selling goods and services.”
The revisions won’t be enforced until they are published in the Canada Gazette, the federal government’s newspaper. However, bitcoin experts say that the rules won’t be entirely posted or enforced until 2015.
In the meantime, FINTRAC recommends all MSBs to register with the organization, including all businesses dealing with foreign exchange; remitting or transferring funds; or issuing or redeeming money orders, travelers’ cheques or other financial instruments.
In June, we reported that the federal government passed Bill C-31, legislation that requires all bitcoin-related companies to maintain extensive records and to register with FINTRAC. Also, financial institutions would be banned from doing business with companies who have yet to register with FINTRAC.
Bitcoin Foundation Canada has repeatedly averred that peer-to-peer decentralized virtual currencies “do not exist in a legal vacuum and, therefore, sweeping legislative measures concerning Bitcoin are not needed.”
Canada’s latest regulations come as the New York Department of Financial Services (NYDFS) released the newest series of rules that will be applied to bitcoin-related businesses, which has garnered mixed reactions from the bitcoin community as some see it as something to legitimize bitcoin, while others posit that it stifles innovation and helps competitors.
