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Canada’s Bitcoin Regulations Hit Financial and Gambling Sectors

Chris in Uncategorized published on 24, June 2014

Canada Bitcoin Regulation Law

Canada’s first national law on regulating Bitcoin use has imposed immense effects on the Bitcoin and digital currency-powered businesses, even extending to the online gambling industry.

Discreetly received Royal Assent on June 19, Bill C-31 amended the country’s current law to include local and foreign businesses in the Bitcoin and digital currency markets in Canada to the areas covered by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act of 2000.

Although the law does not directly indicate Bitcoin and uses the phrase “dealing in virtual currencies” to refer to businesses in the Bitcoin sector, former Canadian finance minister Jim Flaherty hinted prior the passing of the bill that it is, indeed, about Bitcoin.

As soon as the law is enforced, businesses of such nature operating in Canada or those from the outside, but services consumers in the country, will be regulated and considered as money services businesses (MSB). This, then, requires digital currency-related service providers like Bitcoin exchanges to follow the standards of reporting suspicious transactions, record keeping, verification procedures, and registration requirements.

Moreover, the law forces Bitcoin businesses to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Failure to comply with this requirement disables the MSBs to be serviced by banks as the latter are prohibited from opening accounts for unregistered Bitcoin dealers.

The existence of the country’s first national law has already affected the Bitcoin and alternative currency gambling markets, with two dice betting sites to have been the first reported casualties.

Just Dice and Doge-Dice are under the same operators who are believed to be Canadians. A few days after the signing of the law, a post on the Just Dice official blog announced that the operators of the Bitcoin and Dogecoin dice sites have volunteered to temporarily disable their gambling services until necessary actions are taken with respect to the new regulations on the use of digital currencies in the country.

Meanwhile, the Bitcoin gambling community and enthusiasts are keeping a closer look at the success rate of this law in regulating the use of Bitcoin and alternative currencies in Canada.

 

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