On June 9, the Canadian government released a new draft law on cryptocurrency exchanges and cryptocurrency processing services regulation, as reported by Canada Gazette.
The draft law aims at addressing a “number of deficiencies” on the part of crypto companies outlined by the Financial Action Task Force (FATF) back in 2015-2016, and pursues the strengthening of anti-money laundering (AML) and anti-terrorist financing standards in Canada.
Cryptocurrency exchanges and processing companies are regarded as money service businesses in accordance with the new regulations. This implies greater accountability on large-scale transactions exceeding $10 000 CAD ($7 700 USD) on their part, as well as higher degree of KYC scrutiny in respect of the clients involved in such transactions.
The new legislative initiative also contains a cost-benefit analysis for the implementation of new regulatory norms, totaling $61 000 000 CAD ($47 000 000 USD) over the next ten years.
Francis Pouliot, co-founder of Montreal-based blockchain consulting firm Catallaxy, tweeted his response to the draft:
New requirement: "Large Virtual Currency Transaction Record" means businesses required to ask for and keep details of every transaction over $10,000, like large-cash transaction reports. That's going to be extremely difficult and invasive to implement. I will object to this. pic.twitter.com/PdabH0uGj4
— Francis Pouliot ⚡️ (@francispouliot_) June 8, 2018
It is also worth noting, that Canada is regarded as one of the world’s most attractive countries for cryptocurrency mining. Thus, Hydro Quebec and other Canada’s major electricity suppliers have been approached by ever growing number of cryptocurrency miners willing to use the companies’ services and infrastructure in their trade.