Virtual currency ATMs and trading platforms in the largest Canadian province will need to receive licenses to continue their business. However, local authorities are claiming they have no plans to regulate cryptocurrencies.
Quebec’s AMF (Authorité des marchés financiers) is planning to bring bitcoin businesses in from the cold. Amendments to the Policy Statement accompanying the Money-Services Businesses Act suggest that all businesses operating virtual currency ATMs and trading platforms will have to get a license. According to the transitional provisions of the Money-Services Business Act that came in force in 2012, companies will have six months to file a license application.
The Act requires everyone who operates one of five ‘classes’ of businesses (currency exchange, funds transfers, redemption of traveler cheques, cheque cashing, ATMs) to have a class-specific license. A licensed business is obliged, among other things, to keep a register of transactions and customer information for no less than six years, and be ready to give all the information needed to the authorities.
However, AMF states it “oversees such businesses” but does not “regulate virtual currencies”. “Quebeckers should be careful with virtual currency transactions” because they are not covered by any insurance. Moreover, being anonymous and relatively cheap, virtual currency transactions may be used by fraudsters. Customers should be especially wary of unauthorized trading platforms, says the AFM.
The statement comes unexpectedly to bitcoin users who were waiting for bitcoin regulation on the federal level. Francis Pouliot, the director of public affairs of the Bitcoin Embassy in Quebec, is disappointed that “when federal regulation is implemented, the Quebec entrepreneurs would have an administrative burden two times heavier than their counterparts in other Canadian provinces”. However, according to him, the decision of the AFM is an indirect confirmation that bitcoin is really a currency, as much as the central banks may avoid saying that.
The new regulation met with mixed reactions on the hashtalk.org forum, with some users criticizing the government that “wants to insert itself back into the food chain” and others seeing regulation as something inevitable even though in the past they “liked to give straight fiat to [their] ATM owner and within 5 minutes [the] deal was done, everyone [was] happy.” Currently, according the Bitcoin ATM Map website, no identification is required for purchases of bitcoin less than $3,000 in value at Quebec ATMs.
