Hey Compliance Nerd!
I heard that bitcoin was regulated in Canada, so I tried to register my company as a money services business with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). They wrote back and said that I can’t register because my business is not regulated. I notice that some exchanges in Canada are already registered with FINTRAC though… Why is this?
Unregistered and Unsure
Hey Unregistered and Unsure,
At this point, there are three activities that are considered to be money service business (MSB) activities in Canada:
1. Conducting foreign exchange transactions (fiat to fiat),
2. Sending funds (fiat again) out of Canada, or bringing funds into Canada from abroad, and
3. Issuing or redeeming instruments like money orders or travellers cheques (you guessed it – for fiat currency).
Unless you’re doing one or more of these activities, you won’t be able to register with FINTRAC as an MSB yet.
Which brings us to the exchanges that are already registered. While I can’t speak on behalf of all exchanges, some do offer limited fiat-to-fiat currency exchange transactions, which would cause these companies to fall within the current MSB definition.
Amber D. Scott, MBA, CIPP, CBP, CAMS
Founder & Chief AML Ninja, Outlier Solutions Inc.
Amber is a long time, self-described “compliance nerd”. Amber is a firm believer in the idea that good compliance can enable good business. Find out how at www.outliercanada.com or reach out to her directly at [email protected].