Earlier this week, the Canadian House Finance Committee met and discussed the role of cryptocurrencies. As part of their regular meetings as required by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), cryptocurrencies became a hot topic, as regulators see them as an easy way to launder money.
The usual reasons, according to iPolitics, came up: cryptocurrencies are anonymous, difficult to trace, and have a history of being used by risky personalities such as Edward Snowden and Julian Assange.
The purpose of these committee meetings is to review and assess actions and plans for the PCMLTFA. During these talks, 70 expert witnesses from finance came spoke. In addition, financial adviser IJW & Co. and law firm Durand Morisseau LLP, submitted a 56-page joint brief, outlining the role of cryptocurrencies. They explained that:
In the absence of some degree of regulatory oversight, cryptocurrency transactions may be used by parties to swiftly move large amounts of wealth across borders, and that regulating (exchanges of fiat currencies for cryptocurrencies) would address the (anti-money-laundering) concerns of the cryptocurrency space.
As a result of these committee meetings, the Canadian House Finance Committee outlined three possibilities for how they will regulate the cryptocurrency space.
- Require fiat-to-crypto exchanges to register as money service businesses. This would place them under the extensive compliance laws of PCMLTFA, and help insure user’s funds.
- Create a national license for cryptocurrency exchanges operating in Canada. Similar to New York State’s BitLicense, this license would only be offered to exchanges that pass through rigorous screening and background checks.
- Regulate cryptocurrency wallet companies, so that any suspicious or unlawful transactions can be tracked or monitored by regulators.
These are not official laws yet, but these suggestions hint at what direction regulators will take when regulations do come out. It’s reported the committee will submit their recommendations to the House of Commons within 120 days.