Canada VASP

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Digital Asset Licenses
Canada VASP

Activities

A Canada Virtual Asset Service Provider (VASP) License allows businesses to legally engage in digital asset services under the supervision of FINTRAC (Financial Transactions and Reports Analysis Centre of Canada). Licensed entities can provide the following services:

Digital Assets Exchanges
Facilitate the buying, selling, and trading of virtual currencies such as Bitcoin, Ethereum, and other digital assets.
Wallet Services
Offer digital wallet solutions for the storage, transfer, and management of digital assets.
Payment Processing
Provide payment services using digital assets for businesses or individuals.
Digital Assets to Fiat and Fiat to Digital Assets Services
Enable conversions between digital assets and traditional fiat currencies (e.g., CAD, USD).
Transfer and Remittance Services
Conduct transactions in cryptocurrencies, enabling cross-border payments and remittances.
Initial Coin Offerings (ICOs) and Security Token Offerings (STOs)
Facilitate or advise on the issuance of new digital tokens, depending on compliance with securities laws.

Requirements

To operate legally as a VASP in Canada, businesses must adhere to the following regulatory requirements:

FINTRAC Registration
All VASPs must be registered with FINTRAC as a money services business (MSB). This registration is mandatory for both domestic and foreign firms operating in Canada.
Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Compliance
VASPs must implement strong AML/CTF policies. This includes conducting KYC (Know Your Customer) checks, monitoring transactions for suspicious activity, and reporting any suspicious transactions to FINTRAC.
Record Keeping
VASPs are required to maintain detailed records of customer information, transaction histories, and any compliance reports, ensuring transparency and regulatory oversight.
Compliance Officer
Appoint a designated compliance officer responsible for overseeing the company’s adherence to AML/CTF regulations and ensuring all reporting obligations are met.
Cybersecurity Standards
Ensure that robust cybersecurity measures are in place to protect customer assets, prevent data breaches, and safeguard against fraud and theft.
Reporting Obligations
VASPs are required to submit reports to FINTRAC for large transactions, international wire transfers, and any suspicious activities.
Audits and Ongoing Compliance
Regular internal audits and compliance checks must be conducted to ensure ongoing adherence to FINTRAC regulations and prevent any lapses in compliance.
Capital Requirements
Depending on the scope and size of the business, minimum capital requirements may apply to ensure financial stability.

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