Coinbase users in Canada will soon be required to report the details of recipients who receive large transactions, according to a notice sent to users.
Coinbase Complies
“Starting on April 4, Coinbase will introduce some changes required by Canadian regulations,” the notice reads.
The notice goes on to say that, for transactions above 1,000 CAD (roughly $800), Coinbase is “legally required to ask [users] for information about the recipient of that transaction.” Details that must be reported include the name and address of the recipient. This rule seems to affect transactions with companies rather than individuals, as it applies only when the receiving party is a financial entity, money service business, and or crypto exchange.
A copy of the message sent to customers was obtained by Ryan Sean Adams of Bankless, who shared it on Twitter.
Rules Reflect Regulatory Change
According to Coinbase, these changes are being made in response to an anti-money laundering law called the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
Those regulations, which came into effect in June 2021, require money services businesses to keep records of virtual currency transactions that amount to $1,000 or more. Coinbases decision to announce the rule this week is likely due to the fact that the Canadian authority FINTRAC will begin assessing compliance in April.
Similar record-keeping requirements have long been in effect in the U.S. under the Bank Secrecy Act. Coinbases support pages suggest it complies with those rules, though it is unclear what the reporting threshold is under American regulations.
Canada Is Attracting Attention
Canada has become a topic of discussion within the crypto community of late. In February, the Canadian government attracted attention when it ordered exchanges to block addresses connected with the convoy protesting COVID-19 restrictions.
Incidentally, Binance withdrew its services from Ontario entirely this month due to an inability to negotiate with regulators.
It does not appear that any of these decisions are directly related. The decision to blacklist crypto addresses was made under the now-lifted Emergencies Act. Binances issue was with the Ontario Securities Commission and was limited to one province.
Coinbases actions, meanwhile, are due to nationwide reporting law that has been gradually rolled out over the past year.
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