Crypto license in Canada
More recently (until 2018), there was no regulation of the activities of firms working with cryptocurrencies in Canada. In this regard, market players had multiple questions about the legality of cooperation with local companies in this area. However, several legal acts have recently been adopted that have given legitimacy to this field.
Canada crypto regulation now requires local and foreign platforms that use crypto assets and digital currency in their activities to be classified as organizations offering money services. Anyone who plans to engage in this sphere must apply for a crypto license in Canada and register with the Center to analyze financial transactions and reports. For those seeking a quick entry into the market, there are options to obtain a fast crypto license in Canada.
What is the Canadian MSB license?
When opening a company in Canada, it is mandatory to obtain a special certificate from the state regulator to carry out the following activities:
- Cryptocurrency mining with subsequent trading.
- Trading activities where cryptocurrencies are used as commodities and can be traded following Canadian laws.
- Payment services, cryptocurrency ATMs, and currency exchange platforms.
In addition, anyone who conducts any activity in the field of monetary services, including those provided to Canadian residents from abroad, is required to obtain a secure crypto license in Canada, regardless of the province.
A permit to carry out activities is valid for two years. Shortly before the expiration of this term, the authorities send an official letter with a reminder of the extension. Responsibility for updating the license lies with the owner of the company. The permit will be automatically canceled if they do not submit the appropriate application within 30 days.
Cryptocurrency exchanges in Canada are also required to comply with “know your customer” procedures, act per AML legislation, and undergo compliance with banking institutions.
There are several restrictions on who cannot incorporate such business. These are people convicted of money laundering or terrorist financing, those associated with a criminal organization, or involved in fraudulent contracts and trade transactions.
Generally, the authorization as a financial service provider is not much different from other jurisdictions. The government closely monitors organizations entrusted with its citizens’ financial well-being. Therefore, the selection of applicants is quite tough. However, after acquiring the best crypto license in Canada, the company opens up wide opportunities as a player in the promising crypto market.
Why should you choose www.fintecharbor.com to receive digital finance authorization in Canada?
- Registration in the shortest possible terms.
- All conditions are officially spelled out in the contract.
- Detailed calculation and no hidden fees.
- Simple and clear terms of cooperation.
- Complete confidentiality of your project.
- Full consulting support after certification as a crypto provider.
Requirements for Crypto License in Canada
- Possess the necessary authority and resources to implement an effective compliance program and make any necessary changes.
- Be knowledgeable about the company's functions and structure.
- Understand the ML/TF risks and vulnerabilities, as well as current trends.
The Compliance Officer should have some experience in the compliance field (experience in virtual assets is not necessary) and understand the business well to ensure the company remains compliant.
Required documents
- MSB Compliance Program
- Business Plan (optional, but very useful)
- Biography of Compliance
- Officer (including name, ID and CV)
- Company website (if available)
- Cash flow model
Business mechanics should include a description of funds on the entire route from the moment MSB receives the funds, their subsequent transfer to third parties, including the approximate amounts of these payments, and the presence/absence of intermediaries. In case there are intermediaries, their function and role should be described.
* For convenience, you can describe the route of CAD 1,000 from the moment it arrives at the MSB account to the final destination.
The process to receive a crypto license in Canada
Registering a company in the cryptocurrency sector is no different from other businesses. A limited liability company remains the most common option for both local and foreign investors looking to get a Canada crypto exchange license at the federal or regional level. Our local partners will help with firm incorporation and obtaining a crypto license in Canada. To do this, contact our experts and get a consultation.
Along with the application, you must supply information about the bank account and the compliance of the founder. Information about the company’s composition is also required (data on the structure, founders, number of employees, office). Among the financial documentation, you need to indicate the expected total amount of cryptocurrency transactions in dollars per year for each service. If the company has branches, you need to provide information about them.
Much attention is paid to the absence of criminal records of the first persons of the company and those who have at least 20% of the shares. Therefore, you need to get police clearance certificates. All documents must be in English or French. The filing takes place through a local registered agent and a notary.
To clarify is cryptocurrency legal in Canada, it is important to follow the legal requirements, including obtaining the necessary licenses and permits, to ensure full compliance with Canadian regulations.
Crypto Regulation in Canada
Cryptocurrency operations in Canada are regulated by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), guidelines from FINTRAC (Financial Transactions and Reports Analysis Centre of Canada), and the CRA (Canada Revenue Agency). Crypto regulation in Canada ensures that activities involving virtual assets comply with anti-money laundering and counter-terrorism financing laws.
Depending on the guarantees that each particular virtual asset provides to its users, securities regulation may also apply.
In accordance with the Currency Act of Canada and clarifications from CRA, a cryptocurrency is a type of virtual asset that is secured using cryptography. It typically uses a system known as a blockchain to record and maintain a history of transactions.
Crypto regulation in Canada defines cryptocurrency as a means of exchange rather than a form of money. Payment for goods or services using cryptocurrency is taxable as a barter transaction.
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FAQ
Is cryptocurrency trading legal in Canada?
What are the requirements for obtaining a crypto license in Canada?
To obtain Crypto License in Canada it is obligatory to have at least 1 director, 1 shareholder, and 1 compliance officer. Also for MSB license you need to have documents below:
- MSB Compliance Program
- Business Plan (optional, but very useful)
- Biography of Compliance
- Officer (including name, ID and CV)
- Company website (if available)
- Cash flow model
How much does it cost to get a crypto license in Canada?
The cost of obtaining a Canadian MSB (crypto) license includes setting up a company in British Columbia, which is approximately €2,000. The MSB license application (including MSB compliance program documents to meet Canadian regulations) is around €14,000. Additionally, an annual mailing address service will be required, with an estimated cost of €2,000.
*The price can vary depending on specific case of the company.
