Cryptocurrencies have become increasingly popular in recent years, and many users are taking advantage of their flexibility as a financial asset to make convenient purchases with digital cash. But with this convenience has come growing concerns about criminal activities related to the use of cryptocurrency, such as money laundering and other illicit activities. As Canada and its provinces grapple with how to regulate these digital assets, they must also tackle crimes associated with cryptocurrencies.

 

In November 2020, Canadian federal authorities proposed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which makes it illegal to covertly send or receive funds to fund certain obligations. The law also includes provisions specific to digital assets, including a ban on unregistered crypto exchanges, which requires traders to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). This legislation makes it much easier for regulators and law enforcement to identify suspicious transactions and disrupt criminal networks that utilize digital currency networks.

 

Ontario has also been working to address money laundering and other crimes related to cryptocurrencies. In 2018, the provincial government announced the Digital Currency and Blockchain Taskforce, which was established to evaluate current laws and recommend measures to better protect consumers who transact using digital currencies. This taskforce outlines instances where common law and statutory offences may be triggered when engaging in cryptocurrency-related activities. The range of offences include fraud, securities fraud, market manipulation and money laundering, among others.

 

In addition, there is also the question of taxation when it comes to cryptocurrencies. In Canada, capital gains from cryptocurrencies are considered part of a taxpayer’s total income, and thus subject to taxation. The CRA has issued specific guidelines and requirements for taxpayers to report their cryptocurrency transactions in order to ensure that they are paying any taxes owed. Furthermore, those dealing in large sums of cryptocurrencies should also be aware of existing laws that may require them to report the proceeds to Canadian authorities.

 

Overall, cryptocurrencies are gaining traction in the financial world and can provide an effective means of financial transaction for legitimate investors. However, due to the anonymous nature of digital assets, it is essential that regulations and oversight are in place in order to protect consumers and reduce crime related to the buying and selling of cryptocurrencies. Canada and its provinces are taking steps to ensure adequate regulation and enforcement, so it is important for investors and users of digital cash to familiarize themselves with the current laws in order to ensure they remain compliant.