Coinbase (COIN) - the first publicly traded cryptocurrency exchange has sent out email communications on March 25, 2022 to their Canadian users, introducing changes required by Canadian regulations.
Starting April 4th 2022, transactions to other exchanges or financial entities exceeding $1000 CAD require information about the recipient of that transaction – their name and address.
Sending cryptocurrency from Coinbase to another financial institution or exchanges will require the user to provide the name and address of the recipient for users in Canada, Japan and Singapore in order to comply with local travel rules taking effect in early April.
The rule which takes effect starting April 4th for Canadians is to comply with Canada's Financial Transactions and Reports Analysis Centre (FINTRAC) travel rules for electronic and virtual currency transfers. FINTRAC's purpose aims to detect, prevent and deter money laundering and the financing of terrorist activities.
Cryptocurrency exchanges which are legally recognized as a Money Service Business (MSB) must comply with the record keeping requirements set out by FINTRAC. Most notably Coinbase and other MSB must keep records and send reports on:
- Large cash and virtual currency transaction records of $3,000 or more
- Records of remitting and transmitting $1,000 or more in funds
- Records of electronic funds transfers of $1,000 or more
- Records of virtual currency transfers equivalent to $1,000 or more
The last requirement affects the users because not only do records of virtual currency transfers of $1,000 or more must be recorded, but also the name, address and the account number or other reference number (if any) of the beneficiary. The new requirements for Coinbase transfers does not sit well with crypto users as many value the anonymity and decentralization from using cryptocurrencies.
Regulations and policies will continue in 2022 as the crypto market adoption comes to the masses. Expect other cryptocurrency exchanges to follow suit as they too will need to comply in order to operate in Canada.
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