Crowdfunding sites must now report transactions to Canada’s financial crimes watchdog – National

Ottawa is now requiring crowdfunding sites to record and report transactions to the federal money laundering watchdog following the truck convoy protests earlier this year.

In updated regulations released April 27, the government said crowdfunding platforms, which were instrumental in funding the Freedom Convoy protests in Ottawa, are now required to register with the Financial Transactions and Reports Analysis Center of Canada (FINTRAC).

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Reporting requirements include suspicious transactions and high value transactions, record keeping and customer due diligence; platforms must also develop a compliance program, the government said.

“These requirements cover prescribed fiat and virtual currency transactions, and apply to domestic entities, as well as foreign entities when directing their services to Canadians,” the government added.

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The convoy protests that gripped Ottawa in January and February led to an almost complete closure of the downtown area, which is heavily residential, and led to dozens of arrests.

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Police eventually evacuated the protests, which included encampments throughout downtown Ottawa.

In March, crowdfunding platforms GoFundMe and GiveSendGo defended their handling of so-called “Freedom Convoy” fundraising campaigns that put the due diligence of these platforms and their payment partners under the scrutiny of Canadian lawmakers.

Appearances by the platform’s executives at a parliamentary committee meeting, alongside executives of their payment processors PayPal and Stripe, came nearly five weeks after the convoy arrived in the nation’s capital on 28 january.

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Fundraising campaigns raised millions of dollars, but the government cracked down on the platforms when it invoked the Emergency Measures Act to shut down the convoy. GoFundMe shut down access to funds after the protests were deemed “unlawful” by the government and police.

“Canada assessed the risks posed by crowdfunding platforms and payment service providers in its latest National Inherent Risk Assessment conducted in 2021, and found the risks posed by these sectors to be medium and high, respectively,” the government said in its regulatory update.

“Additionally, the FATF (Financial Action Task Force) has identified crowdfunding platforms as an emerging area of ​​risk for terrorist financing.”

The occupation of the “Freedom Convoy” was expected to cost the City of Ottawa at least $30 million, officials said earlier in February.

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