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back to article Canadian regulators welcome US Bitcoin refugees with open arms

Canadian Bitcoin traders will not be clobbered by laws similar to those being used to target virtual currency exchanges in America, according to a leaked letter from the country's financial investigations unit. The Register has seen a letter from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) which …

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Anonymous Coward

Hmmmm

I have spent £40 on bitcoins, and of those, used about £20 worth for a subscription to an NZB site, and a filesharing site.

The remaining £20 worth are now worth £55, so I am a happy bunny ;)

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Anonymous Coward

Re: Hmmmm

Cool story!

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Anonymous Coward

Re: Hmmmm

Bro!

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wow, dont spend all that virtual money at once sir.

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Silver badge

Virtual Money

like the £ or the $ or the €. It's all Virtual and most of it exists as numbers in a computer

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Silver badge

Someone needs to look up "fiat money".

That said, I don't trust the Bitcoin infrastructure. I guess I simply don't know enough about how it works, and with life being too short to do everything, this is one thing I am letting slip by.

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Anonymous Coward

I suggest you do spend it, while It's still worth something, ASAP, even.

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Anonymous Coward

Re: Virtual Money

You just identified the main reason we don't need bitcoin, ie it's redundant. Congratulations.

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Anonymous Coward

I suspect (and this is only a suspicion) that once Canada welcomes all those juicy Bitcoins they will change their minds and grab the free cash like their Yank cousins. They have done it in the past. Canada is not the only country that needs as much as they can lay their hands on.

Quite lucrative when you can simply take someone else's things and cash.

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Anonymous Coward

Here's the thing not a lot of people will know. Untill not that long ago, we didn't even have a nation wide financial rules for a lot of things in Canada. A lot of it was left to the provinces. It led to an untraceable mess of never actually applied regulations and after some rather high flying financial scandals, it looks like it finally got fixed.

Glad to see they are as useless as the old regime ...

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Anonymous Coward

And there was me thinking that only transactions in CASH above a certain amount have to be reported for anti money laundering.

If it's already in the bank either it's legit or it's already been laundered.

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Bronze badge

Mid-March, FinCEN put out a new interpretation of the US regulations. They're the US enforcers on this, and what they think the rules mean matters a lot. They seem to be aiming at virtual currencies of all kinds, and it looks as though they regard virtual currencies as cash.

I'm not sure that anyone knows what is really happening, but the new interpretation take full effect, with possible prosecution, in a little less than four months from now. And it already seems to have scared Linden Labs, with the Linden Dollar currency used in Second Life, into a burst of headless chicken mode.

The way FinCEN thinks makes a bit of sense in what they consider to be cash. But the registration requirements might take in a lot of small businesses. Is it Western Union as a whole, or are the local stores with the Wester Union sign dragged in?

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Silver badge

Oh the irony

The way Bitcoin is supposed to work makes BTC real cash. It might be e-Cash, but its cash.

FinCEN's announcement was actually seen by the economists as a good thing, as it means that the US Gov't is seeing BTC as a legitimate thing, not a Ponzi or a fraud, but an actual coin. Thus Bitcoin traders being stamped as Money Service Businesses. The only thing that traders have to do is to comply with FinCEN's MSB regulations and they're good to go!

The weird thing is that those who are complying with these regulations, like OKPay, are getting spooked by the recent Liberty Reserve clampdown. They should be on the clear!

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Anonymous Coward

@AC 20May 19:21 GMT

"And there was me thinking that only transactions in CASH above a certain amount have to be reported for anti money laundering."

I think you'll find financial entry/exit points for trading in cash substitutes, e.g. anonymous bearer bonds denominated in ounces of gold would be subject to the same regulations.

An approach I'm sure is well-known to the authorities involves 2 guys going into a casino with identical on the outside looking briefcases, one containing cocaine, using the casino's chips for the purchase. Buyer claims he had a bad night at the tables, seller claims he had a good night both plausibly. They could even pretend to play poker with a couple of shills present to make it look credible. Avoids many risks e.g. of firearms being pulled, due to the casino's security perimeter and procedures.

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Big Brother

"This is a big win for Canadian exchanges, because US citizens can simply trade from across the border."

No. Because US regulators have a very long arm and will reach across any border they wish to in order to regulate their citizens. I think the Canadian exchanges will find that by having just one US customer, they may have to open all of their books to US banking/securities regulators.

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Anonymous Coward

The USA has form for kidnap, torture and execution of democratically elected leaders.

Canada had better be careful.

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Bronze badge

Unless...

... they just tell the US regulators to do one.

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Anonymous Coward

And Canafa

has form for burning down the White House.... although some time ago :-)

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>No. Because US regulators have a very long arm and will reach across any border they wish to in order to regulate their citizens. I think the Canadian exchanges will find that by having just one US customer, they may have to open all of their books to US banking/securities regulators.

Ya, those US financial regulators in a rush to regulate (rolls eyes). Come to Canada, we will show you how and what to regulate when it comes to finance (applies to world + dog). Small little problem with your theory, you won't find a Canadian judge to sign off on demands, so until the government decides, though bananas.

If you really had your tin-foil conspiracy hat on proper, you would realize that this is actually a perfect ploy for FINTRAC to follow the cash trail all the meanwhile pretending that they don't care.

>The USA has form for kidnap, torture and execution of democratically elected leaders.

>Canada had better be careful.

Careful - ha - better than that, we are prepared and have already infiltrated much of the US financial, media, entertainment, and political establishment. On the other hand, you can have Harper.

>And Canafa has form for burning down the White House.... although some time ago :-)

Eh hoser, beer typing will get you kicked off the BBQ team!

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> On the other hand, you can have Harper.

Harper was always one of theirs.

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Pint

>And Canafa has form for burning down the White House.... although some time ago :-)

Eh hoser, beer typing will get you kicked off the BBQ team!

http://en.wikipedia.org/wiki/Burning_of_Washington

There, go learn some history.

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Happy

Re: Mad Chaz

Well aware of history.

Misspelling Canada is a grave error and leads one question whether his fellow citizen is fit to take place in a 're-enactment' as one prone to such slip ups may jeopardize the mission.

http://en.wikipedia.org/wiki/Hoser

There, go learn some Canadiana.

At the risk of utterly ruining my joke - which any Canadian worth his toque got - there are 5 elements:

1. Eh - see the link on the hoser wikipedia page

2. hoser - wikipedia again

3. beer - we Canucks like our beer which caused the AC to type 'f' instead of 'd'

4. BBQ - refers to grilling of meat over fire, but in this case is an allusion to the wikipedia link you helpfully posted

5. ! - the exclamation point drives home the point and mirrors the use and intonation of 1-4 in the Great White North skits

Out of understanding for your deprived upbringing, I will not be down-voting you as it is an honest mistake. Take off, eh.

^all the above is jest in good faith, and now concludes our segment on Canadian humor.

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Only temporary....

The Canadians are smarter than the Americans, they are choosing to *observe* the development of virtual currency initiatives before they clamp on regulatory controls. Even though virtual currency is an intolerable competitor to fiat currency systems, it is not clear how they can be killed, let alone how best to kill them. There are too many unknowns, to start driving anything underground.

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Bronze badge

Unfortunately...

The current administration almost HAS to crack down on BC, et al.

The looney fringe on the far right -- which includes/controls many Republican Congress-critters -- keeps trying to paint Obama as a Commie.Muslim/Fascist/Pinko One-Worlder. One of the canards that pops up repeatedly is that he plans to eliminate the dollar and go with... I don't know... some U.N.-mandated world currency (They never actually seem to KNOW what he's going to replace the greenback with, just that it's going to be internationalist and un-American!).

That being the case, and independent of what he ACTUALLY may feel about such things, any sign of tolerance by the Feds for something that is, after all, INTENDED to be the exact sort of independent international virtual-currency that they fear will just feed into the Tea Partiers' paranoid fantasies and give them an excuse to tie even MORE members of the administration up testifying in interminable Congressional hearings.

Were I the suspicious and cynical sort of individual (Which, of course, I'm NOT! *a-HENH!*) I might actually suspect that their secret goal is to keep EVERY executive-branch employee permanently testifying before the various subcommittees in order to make sure that nothing gets accomplished for the rest of Obama's term.

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Unhappy

Re: Unfortunately...

The irony is that Bitcoin is exactly the sort of thing that libertarian-leaning right-wingers ought to be welcoming with open arms and trying to protect. It's early days, but the intention is to create a form of currency that's (a) as "hard" as gold, (b) electronically tradeable, and (c) anonymous, just like fiat paper used to be, until circa 1970.

Shows how far the Republican party has fallen, that it will shoot itself in both feet just to bash the Democrats. Do they WANT the state to be able to trace every financial transaction by every "free" citizen? Do they WANT the state to be able to hyper-inflate everybody's savings out of existence? I feat that both of these things will be visited on the USA, and probably the UK, within my lifetime.

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Anonymous Coward

Mr. X

« The boss of Canadian Bitcoin exchange Cadbitcoin, whose name we agreed to keep private »

Love it. There is a certain post-cyberpunkish feel to having your money held and processed by people who cannot even be named. :-)

[ Not taking position for or against in this whole Bitcoin thing, just a curious observer, btw. ]

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Anonymous Coward

So when does bitcoin exchange become money services? Only when a country adopts it as their national currency? What about bitcoin exchanges that accept more than one real currency in a way that makes it possible to exchange one real currency for another?

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Silver badge

You could ask the same question about Gold, or any other fungible store of value. Whatever your nation enacts as law, is probably as good an answer as you'll get. In the UK, the rules are different for Sovereigns (=UK currency), Krugerrands (=SA currency) and gold bullion bars (commodity, not currency).

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