Canadian MSB License

1. Incorporate a Canadian Entity

Begin by legally incorporating your business in Canada, Select a Canadian province (BC, Ontario, or Alberta) for incorporation. Prepare an Articles of Incorporation and reserve the company name. Have at least one director and one shareholder. Obtain a Business Number (BN) and register for applicable taxes (GST/HST, payroll, etc.).

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2. Implement an AML Compliance Program

Prior to licensing, develop a robust Anti-Money Laundering and Counter Terrorist Financing (AML/CTF) compliance program as required by Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). This program must include appointing a dedicated Compliance Officer (at a senior management level), written internal policies and procedures to detect and report suspicious transactions, an ongoing employee training program on AML duties, and a documented risk assessment of your business’s vulnerabilities to money laundering/terrorism financing. Essentially, you need a compliance manual that meets FINTRAC’s guidelines and systems for verifying client identity (KYC) and record-keeping.
 

3. Register as an MSB with FINTRAC

In Canada, there isn’t a single “crypto license” – instead, crypto exchanges and similar businesses must register as a Money Services Business (MSB) with FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada). MSB registration is mandatory for any business “dealing in virtual currency,” which includes crypto exchange services or money transfer services involving crypto.

To register:
Complete FINTRAC’s Pre-registration Web Form for MSBs online. FINTRAC will then provide you access to the full registration form via their secure portal (or Canada Post Connect).

Fill out the registration form with detailed information: your business’s legal name, Canadian address, incorporation number, names and home addresses of all owners/directors, the identities of your beneficial owners, and the specific MSB services you will offer (e.g. “dealing in virtual currency” which covers both exchange and transfer). You must also supply information about your appointed Compliance Officer and a description of your AML policies in place.

Submit the registration through the FINTRAC portal. Notably, FINTRAC does not charge a fee for MSB registration. Once FINTRAC processes the application (typically a few weeks), you will receive an MSB registration number and confirmation by email. This registration must be in place before beginning operations involving crypto transactions in Canada.
 

4. Comply with Securities Laws (if applicable)

If your crypto business involves trading or custodial services that fall under securities or derivatives regulations (for example, operating a crypto trading platform for Canadian clients), you must engage with Canadian securities regulators. The Canadian Securities Administrators (CSA) currently require crypto asset trading platforms to either register as a securities dealer (e.g. a Restricted Dealer or Investment Dealer, depending on the business model) or obtain exemptive relief. This process is separate from FINTRAC and involves:

Filing an application with the provincial securities commission (e.g., the Ontario Securities Commission if in Ontario) for the appropriate category of registration. You’ll need to meet capital requirements for dealers (which can be on the order of CAD $50,000 to $5,000,000, depending on the category and activities), have certain officers like a Chief Compliance Officer and UDP (Ultimate Designated Person), and implement investor protection policies (like insurance, custodian arrangements, and disclosure statements).

If not immediately registering, crypto platforms must sign a Pre-Registration Undertaking (PRU) with regulators, committing to abide by certain terms (such as limits on products, leverage bans, and segregation of assets) while their full registration is in progress. This is an interim step that has become standard in Canada.

Note: Pure crypto-to-crypto exchanges not offering any regulated products might avoid securities registration, but most fiat-to-crypto platforms are considered to be dealing in securities (due to crypto contracts) by CSA guidance. Legal counsel is advised to determine your status.
 

5. Additional Provincial Licensing

Check for any provincial MSB licensing. For example, in Quebec, you must obtain a money-services business license from the Autorité des marchés financiers (AMF) if you provide virtual currency exchange or ATM services in Quebec. This entails a separate application, background checks, and fees. Similarly, certain provinces have consumer protection or specific requirements (e.g., British Columbia has guidelines for crypto ATMs requiring registration and implementing tracking software).
 

6. Launch and Ongoing Compliance

Once FINTRAC registration (and any other required licenses) are secured, you may commence operations. Ensure that all compliance measures are active from day one. This means conducting KYC identity verification for all customers (collect and verify IDs), monitoring transactions in real-time for suspicious indicators, and keeping detailed records of transactions (FINTRAC requires records of virtual currency transactions ≥ CAD $1,000, large transaction reports for ≥ CAD $10,000, etc.).

You must file reports to FINTRAC: Suspicious Transaction Reports (STRs) for any transaction with reasonable grounds to suspect illicit activity, Large Virtual Currency Transaction Reports for amounts ≥ CAD $10k in a single or related series of crypto transactions, and Terrorist Property Reports if you have property in your control you suspect is linked to terrorism. FINTRAC examiners may audit your business periodically – maintaining an up-to-date compliance program and training logs is crucial. Also, renew your MSB registration every 2 years and update FINTRAC within 30 days of any material changes (new business activity, new ownership, etc.).

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