The Financial Transactions and Reports Analysis Centre of Canada has issued a guidance for reporting virtual currency transactions. This guidance has come into effect from June 1, 2021. The guidance discusses when and how entities must report large virtual currency transactions and submit LVCTRs. It also highlights LVCTR validation rules, forms and upload information. Highlights from this guidance are discussed below.
All employers belonging to the reporting entity (RE) sectors are responsible for meeting the large virtual currency transaction reporting requirements under Canada’s Proceeds of Crime (Money laundering) and Terrorist Financing Act (PCMLFTA) and associated Regulations. A service provider can also submit and correct large virtual currency transaction reports (LVCTRs) on behalf of an RE. However, the RE is still primarily responsible for ensuring that they have met all PCMLTFA obligations.
If an RE receives virtual currency worth over CA$10,000 ($8,279) in one transaction, they must submit an LVCTR to FINTRAC. Furthermore, an RE must also submit an LVCTR if they receive two or more virtual currency transactions summing over CA$10,000 in a consecutive 24-hour window, either from or to the same person or entity, or from someone acting on behalf of this person or entity. The RE must submit the relevant LVCTR to FINTRAC within five working days of receipt of the virtual currency transaction. Moreover, LVCTR submissions may also require the submission of Suspicious Transaction Reports if there is reason to suspect ML/TF activities.
All REs must also ensure that their compliance program provides apt information on how to assess the reportability of a virtual currency transaction and submit LVCTRs to FINTRAC. Even if an organization has an automated system to identify reportable transactions, ultimately a person must assess these transactions.