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Crypto Dealers Must Register as Money Service Businesses, Canada’s Proceeds of Crime Regulations State

In a move to combat money laundering and terrorist financing, dealers in virtual currencies must register as money service businesses (MSBs) in accordance with Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFRs).

Global Trend towards Stricter Regulation

This requirement is part of a global trend towards stricter regulation of the cryptocurrency industry. Across the European Union, crypto regulations are governed by the 5th Anti-Money Laundering Directive, which brought crypto-to-fiat exchanges and custodial wallets into scope.

Regional Regulations

  • Asia-Pacific: Australia treats cryptoassets as either financial products regulated by the Australian Securities and Investment Commission (ASIC) or as consumer products regulated by the Australian Competition and Consumer Commission (ACCC). Singapore regulates cryptoassets under the Payment Services Act (PSA), with providers required to be authorized by the Monetary Authority of Singapore (MAS).
  • Japan: has introduced regulations specific to crypto exchanges.
  • China: has banned all cryptocurrency transactions except for its own digital yuan.

The Increasing Regulatory Landscape

The increasing regulatory landscape is forcing firms to adapt and comply with anti-money laundering (AML) requirements. Non-compliance can lead to serious consequences, including being denied a license to operate, relocation or closure, as well as significant manual remediation work.

Complying with AML Regulations

  • Conduct horizon scanning, mapping upcoming regulatory changes to compliance budgets ahead of time.
  • Invest in staff and resources to cope with new requirements.
  • Understand the impact of new regulations on your business and engage with local regulators through consultations.

Practical Guidance

In a recent guide, ComplyAdvantage explored the importance of a proactive regulatory approach for crypto firms, highlighting the risks of non-compliance and providing practical guidance on building an AML program. Get ahead of the curve by downloading our free guide to AML compliance for crypto firms.

Disclaimer

This article is for general information only and does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.