Budget 2023 promises plan to protect Canadians from crypto risk – National

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Law enforcement could get new powers to freeze or seize cryptocurrency suspected of being linked to criminal activity under the Liberals’ 2023 budget plans.

It’s a problem that was highlighted during last year’s convoy protests, when the government used exceptional emergency powers to surveil and freeze assets believed to be fueling the protests.

The government is also signaling its intention to take further steps to protect Canadians from the risks associated with crypto-assets, including requiring financial institutions and pension funds to disclose their exposure to volatile cryptocurrency markets.

The measures are part of a series of proposals in Budget 2023 that the Liberal government hopes will help tackle money laundering, terrorist financing and other financial crimes.

Canada needs a comprehensive, responsive and modern system to counter sophisticated and rapidly evolving (financial) threats, the budget document says.

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Canada must not be a financial paradise for oligarchs or kleptocratic apparatchiks of authoritarian, corrupt or theocratic regimes like those of Russia, China, Iran and Haiti. We will not allow our world-renowned financial system to be used to smuggle and illegally move money to finance foreign interference in Canada.

Read more: What Budget 2023 teaches us about foreign interference and banking risks

Proposed measures include allowing law enforcement to freeze or seize virtual assets suspected of being linked to criminal activity, as well as creating a new offense for structuring financial transactions to prevent having to report them to the Financial Transactions and Reports Analysis Center of Canada. (FINTRAC).

In order to crack down on individuals and businesses that attempt to evade sanctions, the financial industry will also be required to report sanctions-related information to FINTRAC.

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Tackling financial crime has recently been high on the agenda of Liberal budgets, with the government announcing in 2022 that it would create a new Financial Crimes Agency of Canada. The agency, housed within the federal Department of Public Safety, has been touted as Canada’s lead agency for investigating financial crime.

A year later, Public Safety Canada is still consulting on the best way to set up the new agency. But the government maintains it will muster the expertise needed to increase money laundering charges, prosecutions and convictions, and asset forfeiture results in Canada.

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These actions will address key operational challenges identified in domestic and international reviews of Canada’s anti-money laundering and anti-terrorist financing regime, the document states.

Regarding cryptocurrency, the budget document noted the recent volatility in crypto markets as well as the much-publicized collapse of crypto trading platforms like FTX and indicated that the government will require financial institutions and pension funds to they disclose their exposure to crypto-assets.

The government has also announced that it will present proposals to protect Canadians from the risks of crypto asset markets in its fall economic and financial update later this year.

© 2023 Global News, a division of Corus Entertainment Inc.

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