Canada Updates Digital Asset Classification. What About Bitcoin ATMs?

Canadian authorities will now classify digital asset companies as financial services companies. It has been reported that since June 1, amendments to the anti-laundering law will be enacted in the country, which was adopted in June last year.

Now, cryptocurrency companies operating in Canada must inform the regulatory authorities of all transactions exceeding 10 thousand Canadian dollars (approximately, USD $7,400). In addition, they are required to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and, accordingly, comply with the requirements of this regulatory body.

The day before the amendments entered into force, Francis POULIOT, CEO of the local BullBitcoin cryptocurrency exchange, tweeted that this was his last day as an unregulated digital asset dealer. Pouliot emphasized that he had been lobbying for the interests of cryptocurrency for almost seven years, so he considers the legalization of this class of assets a great success. According to Pouliot, changes in the legislation will mainly affect cryptocurrency companies that work with fiat money. He refers to such organizations, for example, operators of bitcoin-ATMs. He also added that most cryptocurrency companies already comply with KYC requirements, because they are required to do this under the terms of cooperation with banks and payment companies.

According to NetCents Technology, at the end of October 2018, 4.8 million Canadian citizens owned cryptocurrency — this is 5% more than in 2017, and 2.9% more than in 2016. Statista data suggests that in 2019, about 3.89% of Canadians used Bitcoin, other cryptocurrencies turned out to be much less popular. For comparison: Ethereum was used by only 0.9% of Canadian citizens.

Major regulators target crypto ATMs

Experts anticipate that Bitcoin ATMs will become a subject of strict regulations, with Canada, Germany, and South Africa being the leading forces in tightening the regulations. In the latter trading Bitcoin in South Africa has become a very popular activity and the dangers associated with money laundering increased as well. Thus, the government decided to adopt strict measures to tackle the issue.

Germany, and in particular, The German Financial Market Authority tackled unlicensed Bitcoin ATMs in March. The introduction of anti-money laundering laws was the main cause of that, as Germany had big deficiencies in the previous crypto regulations.

In July last year, Spanish police also pointed out that a local gang laundered $10 million using BATMs. The United States of America also launched an investigation about the illegal use of cryptocurrencies.

Money laundering is a threat that is extremely hard to tackle. It is especially hard when cryptocurrencies have become prevalent and the nature of laundering is getting sophisticated from time to time. The following regulations will certainly have an impact on ATMs and their future.

Image courtesy of Vancourier