Crypto-funded debit card in Canada

FINTRAC — AML/CFT, MSB registration, transaction reporting

Proceeds of Crime (Money Laundering) and Terrorist Financing Act (2000) — AML/CFT, MSB registration

Evidence fact ca.licensing.csa-staff-notice-21-327 not found (may have been renamed).

VASP: FINTRAC MSB registration (2-4 weeks) + provincial Restricted Dealer registration via CSA (6-18 months). Foreign platforms serving Canadians must register or face enforcement. Binance exited Canada rather than comply.

CUSTODY: Qualified Canadian custodian required for registered platforms. Client asset segregation mandatory.

EXCHANGE: MSB (FINTRAC) + Restricted Dealer or Marketplace registration (provincial). Pre-registration undertakings prohibit margin trading and restrict altcoin offerings. $50K-$100K minimum capital for restricted dealers.

All registrants must maintain minimum capital and insurance based on registration category and business activities; non-IIROC firms require CAD 25,000 to CAD 100,000 depending on category

All registrants must designate a Chief Compliance Officer (CCO) approved by the regulator who must complete the Exempt Market Products Course (EMPC) or equivalent plus CCO training

Registration framework is established through National Instrument 31-103 (NI 31-103) — Registration Requirements, Exemptions and Ongoing Registrant Obligations

Canadian Securities Administrators (CSA): The umbrella organization coordinating provincial and territorial securities regulators, issuing national guidance for crypto asset trading platforms.

Bybit: In March 2023, the OSC reached a settlement with Bybit, requiring the platform to pay $2,468,982 and provide an undertaking that it would not operate in Ontario without registration.

KuCoin: In June 2022, the OSC obtained orders against KuCoin (Mechbit Technology Ltd.) permanently banning it from participating in Ontario's capital markets and requiring it to pay an administrative penalty of $1,650,000 and $99,754 for costs.

Binance: Following a pattern of non-compliance, Binance entered into an undertaking with the OSC in December 2022 to cease all operations in Ontario. Later, in May 2023, the AMF imposed an administrative monetary penalty of $2.25 million on Binance for operating an unregistered platform and offered non-compliant derivatives in Quebec.

Evidence fact ca.tax not found (may have been renamed).

Individuals: Report all dispositions/income on annual T1 return (Schedule 3 for capital gains). Track dates, amounts, fair market values in CAD, counterparties. CRA may audit; retain records 6+ years.

Calculation: Proceeds of disposition minus adjusted cost base (ACB, using average cost method for identical assets). Example: Buy crypto for $3,500 CAD, sell for $4,000 CAD → $500 gain, $250 taxable.

Ongoing Focus on Unregistered Platforms: Securities regulators continue to target platforms operating in Canada without registration. This often results in cease trading orders, financial penalties, and requirements for platforms to either register or exit the Canadian market.