29/09/25
Canada has reinforced its anti-money laundering framework for virtual asset service providers (VASPs). The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) recently updated guidance on the Travel Rule, clarifying obligations for VASPs in verifying, recording, and reporting virtual currency transfers. This update ensures alignment with both domestic law and FATF recommendations.
๐ผ Key Regulatory Framework
The Travel Rule in Canada has been effective since June 1, 2021, under amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). VASPs must now maintain detailed records of originators and beneficiaries for transactions exceeding CAD 1,000 and report suspicious activity. FINTRAC supervises compliance, while provincial securities regulators and IIROC may also hold oversight depending on activities.
๐ Comparative Analysis and Implications
The Canadian framework mirrors FATF Travel Rule standards applied globally, including in the U.S. and EU. Unlike some jurisdictions with grace periods, Canada expects VASPs to maintain full compliance, reflecting a stricter enforcement stance. Entities failing to align risk, regulatory penalties, and reputational exposure.
๐ Practical Impact
Crypto exchanges, trading platforms, and custodial wallets operating in Canada must implement strong customer verification processes. For instance, a platform handling CAD 5,000 transfers must record full originator and beneficiary details and retain these records for future audits. Failure to comply may trigger FINTRAC investigations or sanctions.
๐ Conclusion
The updated FINTRAC guidance underscores the importance of compliance with Canadaโs Travel Rule. VASPs must review and adapt their internal procedures to meet reporting, verification, and record-keeping obligations. NUR Legal provides expert support to navigate these regulatory requirements efficiently and ensure operational compliance. Contact us to safeguard your Canadian crypto operations. Visit us at NUR-Legal.com or contact us directly at info@nur-legal.com
Emil Korpinen