Article Canada: Canada Passes Law Regulating Virtual Currencies as "Money Service Businesses"

(July 9, 2014) On June 19, 2014, the Governor General of Canada gave his royal assent to Bill C-31 (An Act to Implement Certain Provisions of the Budget Tabled in Parliament on February 11, 2014 and Other Measures (Bill C-31), STATUES OF CANADA 2014, Ch. 20), which includes amendments to Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act. (S.C. 2000 (as last amended Dec. 12, 2013), c. 17, JUSTICE LAWS.) The new law will treat virtual currencies, including Bitcoin, as “money service businesses” for purposes of its anti-money laundering law. (Bill C-31, supra.)

As result of the new law, companies dealing in virtual currencies will have to register with the Financial Transactions and Reports Analysis Centre of Canada (Fintrac), implement compliance programs, “keep and retain prescribed records,” report suspicious or terrorist-related property transactions, and determine if any of their customers are “politically exposed persons.” (Christine Duhaime, Canada Implements World’s First National Bitcoin Law, DUHAIME LAW (June 22, 2014).) The law will also apply to virtual currency exchanges operating outside of Canada “who direct services at persons or entities in Canada.” (Bill C-31, supra, § 255(2).) The new amendments also prohibit banks from opening and maintaining accounts or having a “correspondent banking relationship” with companies dealing in virtual currencies, “unless that person or entity is registered with the Centre.” (Id. § 258.)

Though the law has received royal assent it is not yet in force. The amendments will not come into force until subordinate regulations and guidance on the amendments and the regulations are issued. (Christine Duhaime, supra.)

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Canada: Canada Passes Law Regulating Virtual Currencies as "Money Service Businesses"
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Chicago citation style:

Canada: Canada Passes Law Regulating Virtual Currencies as "Money Service Businesses". 2014. Web Page. https://www.loc.gov/item/global-legal-monitor/2014-07-09/canada-canada-passes-law-regulating-virtual-currencies-as-money-service-businesses/.

APA citation style:

(2014) Canada: Canada Passes Law Regulating Virtual Currencies as "Money Service Businesses". [Web Page] Retrieved from the Library of Congress, https://www.loc.gov/item/global-legal-monitor/2014-07-09/canada-canada-passes-law-regulating-virtual-currencies-as-money-service-businesses/.

MLA citation style:

Canada: Canada Passes Law Regulating Virtual Currencies as "Money Service Businesses". 2014. Web Page. Retrieved from the Library of Congress, <www.loc.gov/item/global-legal-monitor/2014-07-09/canada-canada-passes-law-regulating-virtual-currencies-as-money-service-businesses/>.

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