Maintaining an Effective Anti-Money Laundering Strategy

Maintaining an Effective Anti-Money Laundering Strategy | Sam Osei Law
Cryptocurrency businesses and virtual currency dealers operating in Canada or providing services to Canadians, as of June 1, are now considered money services businesses under amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Moving forward, such businesses are required to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and comply with the PCMLTFA and associated regulations.

Cryptocurrency businesses or dealers in virtual currency are subject to anti-money laundering (AML) regulations if they provide a digital currency that is not a legal tender but can be used as a method of payment or investment and can be exchanged for funds or other digital currency, or if they allow access to virtual currency through a private key of a cryptographic system.

Virtual currency exchanges, brokerages, companies operating virtual currency automated teller machines and custodians that hold customers’ private keys on their behalf, for example, wallet providers, must now report to FINTRAC.


Certain types of cryptocurrency businesses are exempt from the new regulations. Exempt cryptocurrency businesses include blockchain developers, cryptocurrency mining companies that provide computational power for transactions or blockchain companies providing technical support to the reporting entities.

Regulatory obligations

Every cryptocurrency business subject to the regulations must:

  • register as a money services business with FINTRAC
  • develop a compliance program for which they must appoint a compliance officer
  • create written anti-money laundering policies and procedures
  • assess specific anti-money laundering risks and document measures that will be taken to mitigate those risks
  • provide ongoing anti-money laundering training for staff and anyone else who will act on behalf of the business
  • conduct a review of the effectiveness of the programs implemented at least once every two years

Penalties for non-compliance

FINTRAC has the legal authority, as Canada’s federal regulator and financial intelligence unit, to issue administrative monetary penalties for non-compliance with AML regulations.

Individuals who do not comply with the AML requirements can face administrative fines up to $100,000 for each violation. Companies can be fined up to $500,000 per violation. In some instances, individuals may face criminal charges. Note, however, that you cannot receive both criminal and administrative monetary penalties for the same instance of non-compliance.

How can a certified anti-money laundering specialist help with compliance?

With the new anti-money laundering measures in effect, you must comply with reporting guidelines to avoid penalties. The above is a summary of the changes to the Proceeds of Crime (Money Laundering) and Terrorism Financing Act. It might be wise to speak with a certified anti-money laundering specialist to ensure you meet all the new legal obligations.

A certified anti-money laundering specialist can help you identify whether your company is required to report under the AML regulations, review the effectiveness of your AML strategies, and assist with compliance training.

If you are searching for a certified anti-money laundering specialist in Vancouver, contact us at Samuel Osei Law Corporation. Our certified anti-money laundering specialist, Samuel Osei, is also a blockchain and cryptocurrency lawyer who will be able to help you implement the required procedures and provide legal advice.

Give us a call today to schedule a consultation. Let us help ensure you are compliant with all the AML requirements.


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