As revealed by a local digital newspaper, the committee suggests that crypto-assets should be regulated. Reportedly, this will enable the committee to swiftly review the proceeds from the Terrorist Financing and Crime Money Laundering Act (PCMLTFA) that is occurring every five years.
Since February, the committee has had 18 meetings for the PCMLTFA review, enumerating three ways that the government could use to regulate cryptocurrencies.
The first recommendation of the committee is to control fiat to crypto exchanges and define them as a money-service business. The recommendation goes in line with the draft of the new cryptocurrency regulation unveiled earlier in June. According to the new draft regulation, payment processors and cryptocurrency exchanges are classified as money-service businesses.
Such businesses operate under strict financial regulations in Canada and must comply with the PCMLTFA.
The second recommendation from the committee is for the government to issue mandatory licenses to crypto exchanges similar to BitLicense in New York. According to the report, suggestions by the Durand Morisseau LLP law firm and financial advisor IJW & Co. with witness-testimonials show the possibility of fraudulent crypto transactions in an unregulated market.
As per the report, cryptocurrencies can help parties to move large amounts of cash across borders easily. Regulating fiat to crypto exchanges will help address the anti-money-laundering issues surrounding the cryptocurrency space.
The final recommendation of the committee is governmental regulation on crypto wallets to make tracking easy. The government will have to reply to the recommendation in 120 days in the House of Commons.
Cryptocurrency regulation is slowly turning into a new trend in jurisdictions worldwide. Recently, the U.S SEC (Securities and Exchange Commission) levied civil penalties on unregistered securities from two ICOs (Initial Coin offerings).