A new Canadian legislative draft outlines the necessity for better anti-terrorism financing (ATF) and anti-money laundering (AML) efforts. Included in this draft are references to virtual currencies and virtual currency exchanges.
According to the draft, in the years of 2015 and 2016, the Canadian Financial Action Task Force (FTAF) evaluated Canada’s current AML and ATF efforts and identified “a number of deficiencies that Canada needs to address.” It is proposed in the draft that further regulation may remedy these deficiencies.
The new regulations will see virtual currency exchanges as money service businesses (MSB). This classification requires those exchanges to report all transactions over $10,000 CAD ($7700 USD). Furthermore, the Know-Your-Customer (KYC) limit will be set at $1000 CAD ($770 USD), which means traders cannot transact over $1000 unless they have provided their name, address, telephone number, occupation, and date of birth.
Not everyone is happy with this development. Francis Pouliot, a well-known Canadian Bitcoin enthusiast, tweeted,
New requirement: “Large Virtual Currency Transaction Record” means businesses required to ask for and keep details of every transaction over $10,000, like large-cash transaction reports. That’s going to be extremely difficult and invasive to implement. I will object to this. pic.twitter.com/PdabH0uGj4
Included in the draft is a cost-benefit analysis of implementing the new regulations. The draft proposes that estimated costs will be around $61 million CAD, and benefits around $2 million, which means a projected $59 million-dollar loss. The draft states that this loss is negligible when taking into consideration the benefits that cannot be monetized, such as a positive impact on Canada’s international reputation, and the obvious safety advantages of increased ATF and AML regulations.