The Canadian government has launched its official draft of new regulations on crypto exchanges and payment processors.
The draft describes new regulations and seeks to address a “number of deficiencies” that the Financial Action Task Force (FATF) defined after evaluating in 2015 to 2016 according to the Gazette.
FAFT is an intergovernmental organisation looking to develop policies to combat money laundering. The main aim of the regulation is to strengthen Country’s Anti-Money Laundering and Anti-Terrorist Financing Regime (AML/ATF).
The new regulations will treat crypto exchanges and payment processors as money service businesses (MSB), which requires them to report large transactions, i.e. those over C$10,000 ($7700). It also sets a new Know Your Customer (KYC) threshold, with transactions set a C$1000 ($770).
The draft also contains a cost-benefit analysis, which reveals the regulations would cost about C$61m ($47m) over the next 10 years.
Its proposed amendments aim to strengthen Canada’s ability to combat money laundering and terrorist activity financing activities and bring operationalise changes to the Act and close gaps in Canada’s AML/ATF Regime.
The amendments also plan help improve reporting entities’ compliance with regulatory requirements; help improve the monitoring and enforcement efforts of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC); improve Canada’s compliance with international standards; and adopt minor technical changes. The proposed regulatory amendments would also update the requirements for reporting entities to perform customer due diligence and help bring them in line with FATF recommendations.
Currently, reporting entities may conduct their own customer due diligence or rely on information collected by an agent, an affiliate or a subsidiary. This provision would be expanded to allow a reporting entity to rely on customer identification that has already been performed by other entities. A reporting entity would also be able to rely on identity verification information from a foreign affiliate.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
