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Coincheck bankdraft5/3/2023 Canada brought entities dealing in virtual currencies under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) as early as 2014, while in 2017 the British Columbia Securities Commission registered the first cryptocurrency-only investment fund. Canada has been fairly proactive in its treatment of cryptocurrencies, primarily regulating them under provincial securities laws. Under the new rules, cryptocurrency exchanges are regarded as brokers and must comply with the relevant AML/CFT reporting and record-keeping obligations.Įnjoyed this episode? Subscribe to the podcast on Apple Podcasts or Spotify, and receive every new episode as soon as it launches.Ĭryptocurrency Regulations Around The World: CanadaĬryptocurrency exchanges: Legal, required to register with FinTRAC after June 1, 2020Ĭryptocurrencies are not legal tender in Canada but can be used to buy goods and services online or in stores that accept them. Congress also debated the status of cryptocurrency service providers in 2021, with new rules included in the Biden administration’s infrastructure bill. Later that year, the President’s Working Group on Financial Markets released a series of recommendations which included a need for new legislation. In 2021, the Biden administration turned its attention to stablecoins, with the intention to address the danger of the tokens’ growth in value. ![]() The Justice Department continues to coordinate with the SEC and CFTC over future cryptocurrency regulations to ensure effective consumer protection and more streamlined regulatory oversight. The rule is expected to be implemented by Fall 2022, and would require exchanges to submit suspicious activity reports (SAR) for transactions over $10,000 and require wallet owners to identify themselves when sending more than $3,000 in a single transaction. In December 2020, FINCEN proposed a new cryptocurrency regulation to impose data collection requirements on cryptocurrency exchanges and wallets. ![]() The US Treasury has emphasized an urgent need for crypto regulations to combat global and domestic criminal activities. In October 2020, FINCEN released a Notice of Proposed Rulemaking (NPRM) on adjustments to the Travel Rule, signaling the introduction of new compliance responsibilities for cryptocurrency exchanges. It places virtual currency exchanges in the same regulatory category as traditional money transmitters and applies all the same regulations, including those set out in the Bank Secrecy Act – which has established its own version of the Travel Rule. In response to guidelines published by FATF in June 2019, FINCEN made clear that it expects crypto exchanges to comply with the “Travel Rule” and gather and share information about the originators and beneficiaries of cryptocurrency transactions. By contrast, The Commodities Futures Trading Commission (CFTC) has adopted a friendlier, “do no harm” approach, describing Bitcoin as a commodity and allowing cryptocurrency derivatives to trade publicly. Meanwhile, the US Securities and Exchange Commission (SEC) has indicated that it considers cryptocurrencies to be securities, and applies securities laws comprehensively to digital wallets and exchanges. ![]() In practice, this means that cryptocurrency exchange service providers must register with FinCEN, implement an AML/CFT program, maintain appropriate records, and submit reports to the authorities. ExchangesĬryptocurrency exchanges are legal in the United States and fall under the regulatory scope of the Bank Secrecy Act (BSA). The Financial Crimes Enforcement Network (FinCEN) does not consider cryptocurrencies to be legal tender but considers cryptocurrency exchanges to be money transmitters on the basis that cryptocurrency tokens are “other value that substitutes for currency.” The Internal Revenue Service (IRS) does not consider cryptocurrency to be legal tender but defines it as “a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value” and has issued tax guidance accordingly. While it is difficult to find a consistent legal approach at the state level, the US continues to progress in developing federal cryptocurrency legislation. Cryptocurrency Regulations Around the World: United StatesĬryptocurrencies: Not considered legal tenderĬryptocurrency exchanges: Legal, regulation varies by state
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