A newly enacted regulation will affect Coinbase users in Canada soon. The exchange will have to ask its users who are going to receive transactions valued at over 1000 CAD.
We can read the following in the notice sent to Canadian customers by the company:
Coinbase will start making changes on April 4 in order to comply with Canadian regulations.
The rest of the announcement states that Coinbase is required to ask users about the recipient of transactions on Coinbase, which includes the name and address of the recipient. This rule seems to apply only to companies, not individuals. It applies only when the party receiving the funds is a financial entity or a company providing financial services.
In a tweet, Ryan Sean Adams of Bankless shared the message Coinbase sent to users. He also suggested the exchange may shut down cryptocurrency wallet withdrawals in the future.
Regulators have updated the rules
Coinbase states that these changes are being made in response to the Anti-Money Laundering Act, which is called the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
The Canadian regulations that came into effect in June 2021 require that financial services companies keep records of virtual currency transactions exceeding CAD 1,000.
Coinbase’s decision to comply is likely to be due to the fact that Canadian regulator FINTRAC is preparing to assess compliance with these rules as early as April.
Coinbase’s support pages indicate that it adheres to the Bank Secrecy Act policies. However, it is unknown what the reporting threshold is under US regulations for Coinbase.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.