Webinar Replay: Crypto Regulation in Canada 🇨🇦

🎙️ Hosted by AMLBot | September 9, 2025 | 👨‍⚖️ Speaker: Niko Demchuk

🎤 Guest: Issac Ru, Architect of the first regulated Canadian stablecoin, FinTech & Compliance Expert

Canada has become one of the most talked-about G7 markets for crypto — not because it copied the EU or US, but because it built its own registration-based system. From FINTRAC oversight to Bank of Canada’s new PSP regime and the role of provincial securities regulators, the framework is unique but often confusing.

That’s why we invited a Canadian compliance expert to unpack what this really means for startups and established players entering the market.

📌 In this webinar:

• Understand Canada’s registration vs licensing approach
• Learn how FINTRAC, RPAA, and CSA/CIRO overlap in practice
• Explore how crypto exchanges, PSPs, and token issuers can stay compliant
• Get clarity on banking, custodianship, and Travel Rule obligations

💡 Key Quote from the Session:
“Canada isn’t a quick-stamp jurisdiction anymore. But for startups seeking a G7 foothold, it’s still one of the most competitive markets — if you build compliance into your DNA.”

🎥 Watch the Replay

How would you describe the overall crypto regulatory landscape in Canada?

Canada operates mainly under a registration-based system (rather than a licensing-based one like the EU or UK). Businesses voluntarily register with regulators and commit to following the rules. This creates a relatively lower barrier to entry and a faster process for becoming a regulated entity.

The three main regulatory pillars are:

• FINTRAC – Canada’s federal AML authority under the Proceeds of Crime, Money Laundering, and Terrorist Financing Act (PCMLTFA).
• Bank of Canada – supervises payment service providers under the Retail Payments Activities Act (RPAA).
• Provincial Securities Regulators / CSA (Canadian Securities Administrators) – oversee crypto trading platforms and securities-related offerings, harmonized nationally but enforced provincially. CIRO (Canadian Investment Regulatory Organization) is the national SRO created in 2023 from IIROC + MFDA amalgamation.

Why does Canada use a registration system instead of licenses?

Regulators here want business growth, innovation, and competition. Instead of long licensing queues, they allow companies to register and then monitor them through audits and ongoing supervision. This approach is more business-friendly and makes Canada competitive compared to G7 peers.

For crypto-to-crypto exchanges, is a FINTRAC registration enough?

It depends on custody.

• Non-custodial model: If trades are delivered immediately (user holds their own wallet), FINTRAC MSB registration may be sufficient.
• Custodial model: If the platform holds client funds (like Coinbase or Kraken), additional securities registration (now via CIRO/CSA framework) may be required.

If fiat is involved and the business holds client funds, then Bank of Canada’s RPAA as a PSP applies.

How can a business know which registration(s) it really needs?

Each business is unique. Some only need FINTRAC MSB; others may also fall under PSP (Bank of Canada) or securities law (CSA/CIRO). The first step is always a legal and compliance assessment — otherwise, companies risk being under- or over-regulated.

What are typical timelines and complexity?

• FINTRAC MSB registration: ~4–6 months, relatively low cost.
• RPAA PSP registration (Bank of Canada): First wave (Nov 2023) has been under national security review; new rounds expected; timing variable.
• Securities (crypto trading platform): Can take up to ~2 years (e.g., Kraken). Costly; requires qualified custodianship, IT security, capital, etc.

Was Canada used for “jurisdiction shopping,” and is scrutiny changing?

In the past, some firms treated MSB registration as a quick credibility stamp without fully building compliance. FINTRAC has tightened supervision and conducts more examinations. With Canada’s FATF evaluation approaching, scrutiny will continue to rise. Canada remains attractive — but you must do it properly.

Is the FATF Travel Rule mandatory in Canada?

Answer:
Yes. All regulated Canadian entities must comply with the Travel Rule and related reporting/record‑keeping obligations.

How hard is banking for crypto firms in Canada?

Not “easy,” but achievable with the right process and partners. Three key account types:

1. Operating account – for expenses, salaries, vendor payments (CAD/USD).
2. Settlement account – client‑funded accounts, critical for MSBs.
3. Cross‑border accounts – to support international rails and currencies.

Startups should set realistic expectations and build access step by step.

Are ICOs, NFTs, and DeFi regulated?

Since 2017–2018, ICOs/token offerings are typically analyzed under securities law. Projects should consult legal experts; offerings may be limited to accredited investors or via exempt markets (e.g., through EMDs). DeFi/NFT treatments are case‑specific and structure‑dependent.

Why choose Canada for a crypto business?

Two main reasons:

1. Registration‑based model – quicker, cheaper, more startup‑friendly than licensing‑heavy regimes (e.g., U.S./EU).
2. G7 market access – sizable retail market, strong payments infrastructure, credibility with partners.

By comparison, a U.S. MSB plus state MTLs can cost $2–3M in bonds/fees — prohibitive for most startups. Canada offers a more realistic pathway for innovation.

Audience Q&A Highlights

• Can a Canadian MSB operate in Latin America?
  You must follow local rules. Canada can serve as a strong base for cross‑border flows (e.g., students, trade), but LATAM activity must meet each country’s requirements.
• Which stablecoins can be traded in Canada?
  USDC is the safest widely available option today. CAD‑denominated stablecoins are emerging (e.g., ShakePay announced plans for 2026). Views on whether a specific token is a “security” depend on structure and regulators’ interpretations.
• Does immediate settlement mean “holding client funds”?
  If settlement is delivered promptly (typically within ~24 hours) and there is no intent to hold client assets, it is not considered holding client funds for RPAA purposes.
• Are exchanges required to use qualified custodians in Canada?
  Yes, if holding client assets (fiat or crypto), qualified custodianship and other safeguards are required under the securities regime.
• Must the Compliance Officer (CAMLO) reside in Canada?
  Not legally required, but strongly recommended. Canadian-based compliance talent supports regulator expectations and the broader goal of building in-country presence.

Final Thoughts

Canada is no longer a “quick stamp” jurisdiction. For startups and global players seeking a G7 foothold, it remains one of the most competitive paths — provided you implement genuine AML, custodial, and operational controls.