The Canadian House Finance Committee has made recommendations on measures to be taken against cryptocurrencies.
These decisions were made following a meeting regarding ways to confront money laundering and terrorist financing within Canada.
During the meeting, there was a lot of discussion around the current cryptocurrency market and the threats that it poses.
The Dominion Bitcoin Mining Company made a request to the committee that there is an official and clear definition released for cryptocurrency, utility tokens and security tokens. Alongside this, it proposed a multi-year sandbox initiative which enables regulated entities within the crypto space to operate with support from the regulator.
One of the big topics posed to the committee was the threats around money laundering, with the Blockchain Association of Canada stating that detection of criminal activities should be completed in collaboration with cryptocurrency exchanges.
Canadian law firm Durand Morisseau also gave its concern towards AML within the industry. It stated that cryptocurrency exchanges, cryptocurrency ATMs and the conversion of fiat or cryptos into an ICO are the areas where KYC and AML checks and requirements must be enforced.
Information required for these checks would include gathering identities of parties opening accounts and wallets at crypto exchanges, and their source of funds.
Following the meeting, the committee made three recommendations around the cryptocurrency space.
The first is that the ‘Government of Canada regulate crypto-exchanges at the point that fiat currency is converted so as to establish these exchanges as money service businesses.’
Its second statement suggests the Government of Canada builds a regulatory regime around crypto wallets to make sure correct identification is required and true ownership of wallets is known to exchanges and law enforcement bodies if needed.
In line with this, it also wants to ensure Bitcoin purchases or real estate and cash cards are tracked properly and backed by AML checks. As well as this, law enforcement bodies should be able to identify and track illegal crypto wallet hacking and failures to report capital gains.
The final recommendation from the committees was for the establishment of a license for crypto exchanges in line with Canadian law, including an AML program.
Copyright © 2018 RegTech Analyst
