Coinbase CEO Brian Armstrong recently issued a warning to the Canadian consumers of the platform to transfer their reserves to a third-party wallet. Armstrong suggested the transfer to prevent the user data from getting into the hands of the Canadian government. He also explained that the government of Canada is in the process of a legislature that will impose strict reporting requirements on the exchange platform.
During the Freedom Convoy protests, the government of Canada imposed an emergency in the North American country for the first time in many decades. The Canadian government also targeted the cryptocurrency exchanges and wallet services providers to issue information about the accounts related to the Freedom Convoy protestors.
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Coinbase is Legally Bound to Share the Transaction Information with the Financial Regulators of Canada
The notice issued by Coinbase informs the consumers in Canada that all transactions above 1,000 Canadian dollars will be reported to a Canadian government agency. Under the implication of the Money Laundering and Terrorist Financing Act, Coinbase will implement the law starting from April 4th.
Coinbase also reserves the right to demand information about the receiver of the money, such as name and address. However, the rule is required for corporate recipients rather than retail traders. According to the copy of the notice circulating on social media platforms, the entities such as financial services, cryptocurrency exchanges, and financial enterprises are included in the reporting requirements.
The PCMLTFA or anti-money laundering law implementation is not a new experience for Coinbase. The company is already compliant with similar reporting restrictions in USA jurisdiction under the Bank Secrecy Laws. Operating as a regulated cryptocurrency exchange Coinbase has no option but to comply with central regulatory agencies such as FINTRAC.
On the other hand, there are some exchange platforms like Binance that have decided to withdraw their services from Ontario. Binance explained that the step was taken on account of the failure of regulatory negotiations with the government of Canada. For a temporary period, Ontario Securities and Exchange Commission also blacklisted non-compliant exchanges. However, according to reports, the blacklist was dissolved later.