In May 2020, Canada stepped forward and introduced a new action that could potentially bring cryptocurrencies out of the gray area and into the light. However, there is both good news and bad news for the hardcore crypto holders.
Canada and Bitcoin
To the north of the United States is the country of Canada, which has been known to the world as one of the friendliest countries, and to the Bitcoin community as one of the countries that is friendliest to crypto.
A lot of cryptocurrency businesses have made their home in Canada due to the combination of friendly government and strategic location. While other countries in the world were uncertain on any of their crypto regulation and whether to "green light" Bitcoin or not, Canada welcomed it. Even the Canadian Revenue Agency (CRA) noted on their website that Bitcoin would be considered a "barter transaction".
Some notable crypto-related companies to sprout from Canada include Bitaccess, Shakepay, and Decentral. Cities such as Toronto, Vancouver, and Ottawa are becoming ever more popular for blockchain startups to make their home versus Hong Kong and Singapore, which are also popular homes of other crypto companies.
FINRAC, monitoring, and overall crypto trust issues
Despite being relatively relaxed on its view on cryptocurrencies, Canada still has to monitor and ensure funds are not used to finance activities that could endanger people, do bad, and so on.
Usually, this financial monitoring is handled by the federal government at FINRAC. A while ago, CoinTelegraph reported that Canada was implementing more regulation to cryptocurrency companies, backed by a tweet by BullBitcoin's Francis Pouliot.
The world of cryptocurrency has relatively been under attack by numerous pyramid schemes, ponzi schemes, and straight-up scams. This has led to uncertainty by crypto users in determining which crypto platforms are legitimate and which are fake.
Canada becomes more enticing for blockchain companies
With the federal government ensuring all Canadian crypto companies are properly regulated and managed, we might not end up having another QuadrigaCX incident, where QuadrigaCX's founder died and did not pass down the details of Quadriga's cold wallets. As a result, the exchange utterly failed and was shut down due to inaccessible funds, leading to users losing a lot of their account balances.
Other sites and platforms have looked sketchy but are real and some that look real but are actually sketchy. Some have indeed tried to prove their legitimacy by stating their business ID number, or their team, or their contact address. However, this is sometimes not enough as people can always set up shell and offshore companies in the Caribbean and such to look legitimate on paper.
Canada's recent choice to regulate and take crypto companies out of the "gray area", creating trust between the platforms and the users as the federal government is making sure user funds are secure and used properly instead of being siphoned to an offshore account and disappear after a few months of operation.
This also means that companies are operating in a territory where privacy and information policy standards are set by the government, which also increases the trust for KYC and fund deposit procedures.
The not-so-good things for crypto lovers
For the hardcore crypto hodler and user, centralized regulation is not something to look forward to. This definitely defeats the purpose of anonymity, as people do prefer anonymity when using crypto platforms due to their lack of trust in the platform.
References:
- https://cointelegraph.com/news/cryptocurrency-firms-now-recognized-as-money-service-businesses-in-canada
- https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/digital-currency/cryptocurrency-guide.html
- https://cointelegraph.com/news/crypto-exchange-quadrigacx-missing-145-mln-after-death-of-founder
Original post: Adventure Bitcoin
