July 10, 2019
Changes to Canada’s anti-money-laundering laws mean there is hope that banks and other financial entities will be “more open” to “dealing with virtual-currency businesses,” Osler partner Lori Stein tells The Globe and Mail. In her article, author Alexandra Posadzki discusses how on June 1, 2020, Canada’s cryptocurrency exchanges will come under the purview of the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC), Canada’s anti-money-laundering watchdog. The rules, according to the article, mean that virtual-currency dealers will be required to identify all of their clients, appoint a compliance officer and keep records of clients and transactions, among other requirements. Lori says that previously, Canadian financial institutions have been “hesitant to provide bank accounts and other services to cryptocurrency exchanges,” due to being seen as high risk for money laundering and terrorist financing. Lori, a partner in Osler’s Corporate Group who specializes in securities regulation, says hopefully that perception will change with the new rules.
“The hope is that now that there is going to be a requirement to register and comply, and oversight by FinTRAC, that banks and other financial entities are going to be more open to providing services to and dealing with virtual-currency businesses," Lori tells The Globe and Mail. "I think that’s a huge plus.”
Lori also cautions that some large international exchanges could stop servicing Canadian clients as a result of having to register as foreign money services businesses.
“It’s going to be interesting to see the extent to which these global players take a sufficient interest in Canada to subject themselves to these rules," Lori tells The Globe and Mail.
If you subscribe to The Globe and Mail online, read author Alexandra Posadzki’s July 10, 2019, article “Canadian cryptocurrency exchange to fall under FinTRAC watch in June 2020.”