The Canadian government has published a draft law on new rules regarding cryptocurrency exchanges, trading platforms and payment systems that work with virtual currencies.

According to the new bill, the Canada's Financial Action Task Force (FATF) assessed Canada's work on combating money laundering and terrorist financing (AML/CFT) between 2015 and 2016 and identified a number of shortcomings that need to be addressed. The draft notes that changes in the legislation are necessary to strengthen the regime against money laundering and the financing of terrorism and will allow to increase compliance of measures with the requirements of the FATF.

"Persons and entities that are “dealing in virtual currency” would be financial entities or other entities deemed domestic or foreign MSBs, as the case may be. These “dealing in” activities include virtual currency exchange services and value transfer services. As required of all MSBs, persons and entities dealing in virtual currencies would need to implement a full compliance program and register with FINTRAC," the government report reads.

In accordance with proposed amendments, currency exchanges, as well as payment systems, will have to report to Canadian authorities large transactions worth more than 10,000 Canadian dollars ($7,700). They will also need to strengthen the requirements for the identification and verification (AML/KYC) of their customers if transaction exceeds 1,000 CAD ($770).

For virtual currency transactions of 1000 CAD or more, the entities would be required to keep records relating to the date of the transaction and the KYC details of those involved in the transaction, among other things.