Record Breaking Cryptocurrency Changes

Canada has made record-breaking changes to its Proceeds of Crime (Money Laundering) and Terrorist Financing Act!   It has been cautiously focused on bringing these changes into law since June 19, 2014 protecting investors and the public but also taking the time to better understand and support the Cryptocurrency Industry.   

August 24, 2017, Canada started by outlining how security law requirements would apply to Initial Coin Offerings or ICOs , Initial Token Offerings or ITOs,  Cryptocurrency Investment Funds, and the Cryptocurrency Exchangers trading these products.  One method they used was by researching Blockchain Technology with Project Jasper.  Another method was to set up the CSA Regulatory Sandbox to encourage the development of innovative products and services which allowed companies engaged in cryptocurrency matters to seek exemptive relief for a set time-limit while testing their products and services in the Canadian market.  The Bank of Canada tested a product and service of their own on the Blockchain to gain needed future insight.

In April 2018 The Bank of Montreal and the Toronto Dominion Bank of Canada banned their credit and debit card customers from buying cryptocurrency with their cards from any entity or exchanger not licensed with Fintrac.  

In the year 2020 Canada has instituted the world’s first national law on digital currencies including Bitcoin treating them as Money Service Businesses!!  This is also the first treatment in law of digital currency financial transactions under the National Money-Laundering Law!!!  

What does this mean for Bitcoin holders in Canada?   These are the same requirements as any MSB dealing in Fiat Currencies currently in Canada.

The Dealers and Exchangers being used to exchange Cryptocurrencies into fiat MUST be registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Investment Fund Managers are also required to be registered with Fintrac.   Every single transaction over $10,000 or more in cash will be reported to the Government.  The receipt of 2 or more cash amounts of less than $10,000 each that total $10,000 or more if the transactions were made by the same individual or entity within 24 hours of time must also be reported.  All Exchangers are now required to keep and retain accurate and reliable verification records as well as report any transaction that is deemed suspicious or has any relation to terrorist property.  The Dealers and Exchangers have the obligation to determine and report if any of their customers are politically exposed persons. These new Amendments to the Law prevent all Banks from opening and maintaining any accounts or having a correspondent banking relationship with companies who deal in virtual currencies unless that person or entity is registered with Fintrac.  These laws apply to any non-Canadian company who has Canadian customers and also to all Cryptocurrency ATM’s.

The law is not yet in full force as it is pending issuance of subsidiary regulations. For example, under the current Taxation laws in Canada using cryptocurrency (which is considered a commodity under Canadian Law) to pay for goods and services is treated as a Barter transaction. Cryptocurrencies are not yet considered to be legal tender in Canada.    Mining cryptocurrencies is considered to be non-taxable if a personal hobby or undertaken for profit.  Commercial Cryptocurrency Miners however, are expected to report their earned income from mining.  Following probate all Wills become public documentation in Canada.  Before any Estate can be probated Estate Planners must ensure clear instructions are securely and confidentially held which point to the exact location of the private key related to the cryptocurrency.  This Private Key cannot be included with any will.  Any capital gains must be reported and paid to the Government of Canada.  

As Canada looks to the future they have a firm vision for Cryptocurrencies.   Canada continues to strive in the world to be a fore-runner with the innovative technology that has brought Cryptocurrencies to light. 

About the author

Laurie St. John had been working online for years and loves to write about cryptocurrency, tokens, and anything relevant to fintech.

Comments

  1. what a great posting Laurie — i am American but gotta believe that if this works up your way then govt. here will not be far behind in trying to make sure govt. always has both its hands in the mix of any thing that puts possibility of power and money in govt. hands — I am not a globalist and most govt. has been corrupted to just power and money and lies — imho

  2. Very good article… Good strategy by your govt about Cryptocurrencies. I think all over the countries think the same.

  3. Thank you Laurie for that article, that’s at least a clear strategy. Other countries may have some general guidelines but in the end of the day the interpretation is often left to the local revenue office where they may have a very limited understanding of cryptocurrencies and only hesitantly are dealing with the cases.

  4. It’s nice to see the evolvement of the acceptance of the cryptocurrency space by a major country without a lot of trauma and drama. I don’t understand why more countries have to play games with their adjustments to the changes that will be brought about because of this industry. I detest the games that are played with the American banks where they threaten their employees with being fired if they engage with crypto while they are making secret deals behind everyone’s back.

  5. I have heard that Canada is now becoming a HUGE player in the cryptocurrency space. It’s wonderful to have so many Canadians in our Compumatrix company that contribute so much and are on the cutting edge of it all. I trust that there will be many countries following Canada’s lead in the near future.

  6. Good to know the Canadian laws governing Cryptocurrencies, especially if you live there! Always heard that ignorance of a law was no excuse in court as a defense so it’s best in my opinion to stay current on the information published so as to hopefully stay out of hot water with the government!

  7. Thanks for sharing this information. Hard to believe how Canada is so close to the USA yet we have such different laws and procedures for crypto. The idea that mining for Bitcoin is Non-taxable sounds like a great incentive for those wanting to mine.
    The increase in set laws also tells me crypto must be growing in popularity. As mass adoption continues, more countries will be forced to implement stricter rules.

  8. there is alot of difference in the actual way of government from canada to the united states — America is Constitutional Republic and although media and politicians just lump it all together as democracy –America is hybrid in actual government not just another euro democracy or as media in USA now does socialist democracy — i hope that soon we will all be on same page in the Crypto world —

  9. The positive is that the discussion is being had in Canada. As we are biased proponents of crypto, statesmen need to protect the common man who does not understand crypto. I applaude the diligence of protection, but also hope they work out ways to become what can be the pioneers in this space for this nation. Radical movements in either direction could be dangerous for Bitcoin. Well thought out solutions to digital currency that can protect their residents of Canada would be a win win solution for both sides.

  10. It looks like Canada is really getting involved in a leadership role Cryptocurrency security. Stricter rules (or maybe it is “clearer rules”) would seem to be very helpful in keeping all of us out of trouble with the government. This whole cryptocurrency world is confusing enough as it is, so let’s get things cleared up and moving forward with some confidence and maybe even a little wisdom. Is that possible?

  11. The IRS is also putting out new updated publications recently they want to make sure they get there’s ….lol…. that is ok I will let my accountant take care of that part of the business, it is better to let the professionals who do this for a living take care of your matters when it comes to taxes and charity’s ect….. I think all countries will get involved eventually and there will be different rules for different regions, I am just excited it is happening.

  12. Canada has set eyes on Bitcoin and Crypto-ecosystem. On October 8th 2014, Committee on Banking, Trade and Commerce
    “Study on the use of digital currency”, 11th session . Andreas M. Antonopolous world known crypto speaker, advocate and teacher was invited to educate the Senate of Canada about Bitcoin. It’s almost a 2 hour session. So, if you going to listen in , get your drink and popcorn
    https://www.youtube.com/watch?v=xUNGFZDO8mM

  13. It’s always good to know all the current rules and regulations on the government regarding cryptocurrency. Though this is geared toward Canadian laws, this makes me motivated to stay up to date with American laws that way I will not get in trouble with the government. Thank you for the information!

  14. I agree with all that has been posted here and no matter what country you call home you must be up to speed on the country’s perspective and outlook on the crypto world and how involved will your govt. be in the everyday happenings and also how deep will their hands be in your pockets — you have to do your own Due Diligence — and this blog and others here are a good start — imho

  15. I am not from Canada, but it is reassuring to know that around the world passionate individuals are making strides on changing current rules and regulations that pertain to bitcoin and cryptocurrencies in general. Sometimes I feel like I am alone in not being able to access my money, but luckily I have an amazing support system through Compumatrix.

  16. this is a great read thru and the replies here so much good thought processes — and it does make me ponder and look past just the accepted norms — and working with a new monetary part the crypto world — i believe doing much research and digging past the norms it is imperative to stay on the right side of success —

  17. Laurie a very comprehensive and informative post.It seems that Canada is far more proactive and way ahead of most other countries including USA.Tackling the cryptocurrency head on at the vey early stages and evolving various Laws Regards Cryptocurrency and how it is to be treated.Requirement of reporting to Fintrac and the entities dealing with Crypto to be licensed by them to prevent any illegal transaction was well thought of.

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