Crypto License in Canada

The total process can take anywhere from four to eight weeks, depending on the complexity of the business structure and the completeness of the application. The preparation phase, which includes company incorporation (if applicable), compliance documentation, and banking setup, usually takes three to four weeks. Once the application is submitted, FINTRAC generally processes and responds within one to two weeks. Delays may occur if additional clarifications are required.

Yes, foreign companies can apply under the Foreign Money Services Business (FMSB) framework. This allows a non-Canadian company to offer crypto-related services to Canadian customers without setting up a local entity. However, to qualify, the company must show a clear business connection to Canada, such as having Canadian clients, operating a “.ca” domain, or being listed in a Canadian business directory. The same compliance requirements apply, including having a Compliance Officer and an AML-KYC program that aligns with FINTRAC regulations.

For businesses applying for an MSB license as a Canadian entity, the requirement for a local director depends on the province of incorporation. Some provinces require a resident director, while others do not. Even in cases where a local director is not legally required, FINTRAC expects MSBs to have a physical presence in Canada, including office space and local operational staff. For FMSBs, there is no obligation to have a Canadian director, but the company must still adhere to Canada’s compliance and reporting regulations.

Maintaining a Crypto License in Canada involves several ongoing obligations. Businesses must renew their MSB or FMSB license every two years and conduct an annual compliance review to ensure their AML-KYC policies meet evolving regulations. They must also monitor and report suspicious transactions, keep detailed records, enforce the Travel Rule, and stay updated with any new directives from FINTRAC. Failure to meet these obligations can result in fines, license suspension, or criminal penalties.

For Canadian-registered MSBs, having a Canadian business bank account is typically required to demonstrate local operations and manage fiat transactions. For FMSBs, a local bank account is not always mandatory, but it can facilitate smoother transactions and improve credibility with Canadian partners. Banks in Canada are generally cautious about working with crypto businesses, so securing an account may require extensive documentation and compliance assurances.

Yes, stablecoins are regulated, and businesses dealing with them may require additional approvals. The Canadian Securities Administrators (CSA) oversee certain aspects of stablecoins, especially those backed by reserves or considered securities. Companies looking to operate with stablecoins must ensure compliance with securities laws and may need to seek additional authorization beyond the standard MSB registration.

A Crypto License in Canada is widely respected due to the country’s strict adherence to FATF (Financial Action Task Force) guidelines and strong regulatory oversight. Many international banking institutions and financial partners recognize the credibility of FINTRAC-registered entities, making it easier for Canadian-licensed businesses to establish global partnerships and banking relationships.

Foreign companies operating under the FMSB license are generally not subject to Canadian corporate taxes unless they have a Permanent Establishment (PE) in Canada. A company is considered to have a PE if it has a significant physical presence, such as an office, employees, or active business operations within Canada. If an FMSB has no substantial presence, it is taxed according to the laws of its home country. Businesses should consult a tax specialist to determine whether they have tax obligations in Canada.

Failure to comply with MSB regulations in Canada can lead to serious consequences. FINTRAC imposes financial penalties for non-compliance, and in severe cases, businesses can have their license revoked or face criminal prosecution. Common violations include failing to implement a proper AML-KYC program, neglecting to report suspicious transactions, or misrepresenting information in the licensing application. Ensuring ongoing compliance is essential to maintaining a valid Crypto License in Canada and avoiding legal and financial repercussions.

The official FINTRAC MSB Registry allows anyone to check whether a business holds a valid Crypto License in Canada. The registry provides information on registered MSBs and FMSBs, including their licensing status, business activities, and compliance history. If a company is not listed or has had its license revoked, it may be operating without proper authorization.

These FAQs provide essential insights into obtaining and maintaining a Crypto License in Canada. Whether you are launching a new crypto business or expanding your operations into Canada, ensuring compliance with FINTRAC regulations is key to long-term success in the Canadian crypto market.