Canada -- Travel Rule Implementation Regulatory Overview

Sending VASPs must include required PII (originator/beneficiary name, address, account/reference number) with transfers.[1][4]

Receiving VASPs must take reasonable measures to obtain missing information, with risk-based policies for allowing, suspending, rejecting transactions, or follow-up actions.[4]

Same information applies to domestic and cross-border transfers; no specific requirements yet for non-custodial/self-hosted wallets.[1]

VASPs must also meet broader record-keeping and reporting under PCMLTFA.[1]

FINTRAC's guidance on transaction reporting (travel rule) is subject to ongoing updates as Canadian regulators are proposing new bans on crypto ATMs and reporting emerging extortion threats, indicating the existing guidance may not reflect current enforcement priorities.

Regulations: Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (e.g., para 124.1(1)(a))[1]

**Requirement:** Entities dealing in virtual currency are categorized as money service businesses (MSBs) or foreign money service businesses (FMSBs) under the PCMLTFA. This means any person or entity operating in Canada that offers services of virtual currency exchange or transfer, and meets certain thresholds, must register with FINTRAC as a "Virtual Asset Service Provider" (VASP).

**Obligations:** Registered VASPs are subject to a range of compliance obligations, including:

**Record Keeping:** Maintaining records of transactions, client identification, and compliance reports.

**Client Identification:** Verifying the identity of clients.

**Reporting:** Reporting suspicious transactions, large cash transactions ($10,000 CAD or more), and electronic funds transfers ($10,000 CAD or more).

**Compliance Program:** Developing and implementing a comprehensive compliance program, including risk assessments, policies and procedures, and ongoing training.

**Implementation:** The "Travel Rule," based on Financial Action Task Force (FATF) Recommendation 16, officially came into force in Canada with amendments to the PCMLTFA in June 2021.

**What it entails:** It requires VASPs (like other financial institutions) to obtain, hold, and transmit specific originator and beneficiary information with transfers of virtual currency (similar to wire transfers). For transactions equal to or greater than $1,000 CAD, VASPs must:

**Obtain Information:** Collect names, addresses, and account numbers (or unique transaction identifiers) for both the sender (originator) and receiver (beneficiary).

**Send Information:** Transmit this information to the beneficiary institution.

**Receive Information:** Receive this information from the originator institution.

**Current Status:** As of April 2026, the Travel Rule is fully in force, and FINTRAC expects compliance. While practical interoperability solutions among VASPs for seamless data exchange continue to evolve globally, Canadian VASPs are required to implement reasonable measures to comply with the information collection and transmission requirements.

Canada is creating a new powerful financial crimes agency that will supersede or replace FINTRAC’s current role, and cryptocurrency ATMs face a ban, signaling a fundamental shift in virtual currency regulation that renders existing FINTRAC guidance outdated.

**FINTRAC – Virtual currency business:** https://fintrac-canafe.canada.ca/reporting-declaration/info/vc-mv-eng

**PCMLTFA – Regulations Amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations:** https://laws-lois.justice.gc.ca/eng/regulations/SOR-2020-101/index.html (Key amendments came into force June 2021)