Regulators Drafting Crypto Regulations Despite Bearish TrendsNovember 18, 2018
Canadian officials have discussed the methods that can be used to prevent money laundering using cryptocurrency transactions. They have come out with three major regulations that they can possibly impose in order to protect the interests of investors.
The Canadian House Finance Committee discussed the role of cryptocurrencies during their regular meetings. The discussion was proposed as a part of the concepts looked upon with respect to the, “(Proceeds of Crime, Money Laundering, and Terrorist Financing Act)” abbreviated as PCMLTFA.
Regulators are looking at cryptocurrency as an easy method for laundering money. This was one of the hottest topics in the Finance Committee discussion early this week.
The regular reasons that were criticized were that cryptocurrencies are anonymous, difficult to track and that these forms of currency are not recognized as legal tender, and as being that kind of money used by risky personalities.
The plans for the PCMLTFA were discussed in the committee meetings and the actions and plans to regulate laundering were discussed in detail in these meetings. About 70 experts from the finance division spoke in this meeting. A 56-page briefing was submitted by a financial advisor from IJW & Co.
The brief outlined the role of cryptocurrencies. If further stated that in the absence of regulations, these transactions can be used to launder wealth across nations. The importance of regulating the cryptocurrency transactions was discussed in length in this meetings.
Ultimately the committee meetings summarized 3 approaches to preventing money laundering in the cryptocurrency space.
- Mandate businesses involved in fiat to crypto conversions to register themselves as money services. Thereby, bringing them under the compliance umbrella of the PCMLTFA. This ultimately will help protect and insure the investor funds.
- Prepare a regulatory framework for cryptocurrency exchanges making them eligible for a national license to operate a cryptocurrency business that can operate in Canada. This license will be offered to the businesses only after they pass the rigorous background checks and screening processes. This they state will be a lot similar to the Bit License from New York.
- Prevent suspicious and unlawful transactions in the cryptocurrency wallets, by regulating these companies by tracking and monitoring the transactions with due auditing.
These laws are not yet official; however, these suggestions provide with a hint of what they can draft in the regulations. These approaches can be expected to come out during the probable draft bill.
The committee is expected to submit their recommendations within 120 days to the House of Commons.
Similar regulations are seen in the upcoming ICO regulations, and such regulatory reforms are also keeping the SEC busy despite the bear market.