Canada's FINTRAC issues Advisory regarding Money Services Businesses dealing in virtual currency

Canada's Financial Transactions and Reports Centre (FINTRAC) issued an advisory of the coming changes to the Proceeds of Crime (Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term) and Terrorist Financing Acts.

In February, additional funding was earmarked for FINTRAC to help it tackle the threats posed by virtual currencies. In June, the Economic Action Plan 2014 Act, No. 1, which amends the money laundering and terrorist financing acts to include virtual currencies, received royal assent.

The advisory says that the changes will come into force once the regulations are published in the Canada Gazette, the official newspaper of the government of Canada. Only entities that transmit virtual currencies are bound by the changes. Businesses or individuals that merely buy virtual currencies or spend them for the purchase of goods and services are not included.

But until the new regulations are in force, only money services businesses (MSBs) engaged in fiat foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term dealing or money transmission are subject to the existing laws.

FINTRAC levies a maximum penalty of up to $2 million and 5 years imprisonment for the failure to report suspicious activity. Lesser penalties are levied for other infractions such as failure to report large transactions or not meeting recordkeeping requirements.