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- Coinbase will now collect information on Canadian Transactions over 1,000 CAD sent to money services businesses.
- The latest policy complies with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act of Canada.
- It is worth mentioning that the policy change is not connected directly to Binance’s withdrawal from Ontario or the Emergencies Act.
As per a notice sent to users, Coinbase users in Canada will need to report the details regarding the recipients who receive large transactions.
As per the notice, Coinbase will make some changes within the regulations under the Canadian regulations, starting on April 4th.
Further, the notice states that Coinbase will be legally bound to ask for information about the recipient of that transaction for transactions above 1,000 CAD (approximately $800). Details such as the name and address need to be included necessarily. This rule will only be applicable when a crypto exchange financial entity, or money service business, is at the receiving end, translating to the fact that it affects transactions with companies instead of individuals.
Customers received a copy of the message, Ryan Sean Adams of Bankless also received a copy who shared it on Twitter.
Coinbase told these changes are being made in response to an anti-money laundering law called the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
Implemented in June 2021, these regulations require money services businesses to document these digital currency transactions that are $1,000 or more. The Canadian Authority, FINTRAC, will start evaluating compliance in April, which could be the potential reason behind the decision to make the announcement this week.
Under the Bank Secrecy Act in the U.S, there is mention of similar document requirements. As per the support pages of Coinbase, it even acts in accordance with those rules. However, it remains unclear what the threshold of the reporting is under American regulations.
Canada has been under the spotlight in the crypto community in recent times. The Canadian government has gained attention when asked the exchanges to block addresses connected; meanwhile, the convoy protested against the COVID-19 restrictions.
Interestingly, Binance stopped its services in Ontario entirely this month because of its inability to negotiate with regulators.
All these decisions do not seem to be directly connected. It is also important to mention that the decision to block the crypto addresses was taken under the now-lifted Emergencies Act. Further, the Binance issue was limited to one province and was with the Ontario Securities Commission.
The actions of Coinbase are because of the reporting law spread all over the nation whose rollout was happening since the past year.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
