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Canadian Securities Regulators Include DLT in 2019–2020 Business Plan

The Canadian Securities Administrators included strategies for DLT and blockchain-based securities regulations in their Business Plan 2019–2022.

The Canadian Securities Administrators (CSA) are focusing on understanding and regulating distributed ledger technology (DLT) and its related components. The Canadian securities regulatory agency included a section on DLT and crypto assets in its Business Plan 2019–2022 that was published on July 13. 

The CSA’s business plan for 2018–2022 was approved on May 28, and represents a collaborative effort by the CSA to define its priorities over the next several years.

Among a range of priorities such as fair and efficient markets, regulatory advancement and reduction of risks, the CSA also pointed out the need to consider the implications of DLT, including blockchain technology. 

The CSA reasoned its interest in DLT with its purported potential to transform the landscape of the financial industry. The CSA thus will explore possible changes to adapt the existing regulatory framework to address the challenges that could arise with regard to crypto assets. The document further specifies:

“This strategic goal consists of (i) identifying the emerging regulatory issues related to technology that require regulatory action or clarity, and (ii) developing a tailored and effective regulatory response for significant issues identified.”

Apart from that, the CSA is going to consider custodial requirements in relation to crypto assets, as well as capital raising issues that may be unique to blockchain-based securities.

As recently reported, cryptocurrency exchanges in Canada will be legally required to register with the Financial Transactions and Reports Analysis Centre of Canada as of June 1, 2020. This requirement will come into effect along with other amendments to Canada’s new Anti-Money Laundering laws next year.

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Canada: Crypto Exchanges Must Register With Financial Watchdog Next June

New AML laws will require Canadian crypto exchanges to register with the country’s financial watchdog FinTRAC next June.

Cryptocurrency exchanges in Canada will be legally required to register with the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) as of June 1, 2020, according to a notice published on July 10.

This requirement will come into effect along with other amendments to Canada’s new anti-money-laundering (AML) laws next year.

Crypto exchanges will also reportedly be required to observe Know Your Customer policies and report any suspicious transactions to the Canadian watchdog; this also includes keeping records of their clients and hiring a compliance officer for their platform.

A report by The Globe and Mail notes that up until now, compliance with these policies has been voluntary, but some exchanges have chosen to do so anyway. 

The motivation for implementing the new policies is reportedly to get Canadian banks onboard and in cooperation with cryptocurrency exchanges.

According to Lori Stein, a partner at business law firm Osler, Hoskin & Harcourt, Canadian financial institutions have historically been concerned about the risk of money laundering and terrorist financing via crypto exchanges. Stein said:

“The hope is that now that there is going to be a requirement to register and comply, and oversight by FinTRAC, that banks and other financial entities are going to be more open to providing services to and dealing with virtual-currency businesses.”

However, Stein points out that some international exchanges may not be willing to comply with the new Canadian rules. Some other experts reportedly agree, saying that having mandatory regulation requirements could result in cryptocurrency exchanges opting to exit from the Canadian marketplace.

The CEO of blockchain startup Bitaccess, Moe Adham, told The Globe and Mail, “I expect to see a number of firms relocate outside of Canada, as well as international firms limiting access to Canadians.”

The new regulatory policies may also drive crypto exchange customers away, some say. “This has the potential to drive cryptocurrency underground again,” said Canadian crypto exchange Coinsquare’s AML officer, Charlene Cieslik. Cieslik said that customers who do not want to reveal their information to exchanges, would likely just transact with each other directly.

As previously reported by Cointelegraph, a bill was signed in 2014 that required some foreign entities to register with FinTRAC for Bitcoin (BTC) payments.

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Bitcoin Blinkers, Deluge Of Fake Canadian Notes Force Tim Horton to Reject $100 Bills

Bitcoin Canadian Dollars

Canadians love their Tim Horton’s coffees in winter and Jolly
Rancher slushies in hot sticky summers. Unfortunately, they can no longer fork
their $100 bills for these treats. Canada’s largest quick service restaurant
chain has recently announced,
“because of all the counterfeit in the area, we will no longer accept $100
bills.” 

The notification, however, is not really that much of a surprise.
Most businesses in North America will not accept payments in bills larger than
$20 notes. Paper money has become so difficult to cash, that shoppers have
acquired the habit of breaking larger bills in banks before going to shop.

Bitcoin (BTC) Is Anti-Counterfeit

Crypto enthusiasts wish that more business would accept more Bitcoin payments instead. Bitcoin cannot be counterfeited or duplicated. No one can forge a token and fraudulently insert it into the system. The network will automatically reject such a scheme as it will prevent double spend of the tokens as well. For every BTC than exists, there is a list of transactions to back it.

The chronological order of origin is bound in blockchain, and this record is public. The BTC blockchain network forms its check and balances system. It is this self-regulatory character of Bitcoin that makes it fully decentralized. It is also the reason why the digital currency cannot be controlled by a single entity. The blockchain backbone is the reason why Tim Horton’s would not suffer losses from counterfeit notes if they mass applied Bitcoin payments in their chain.

Just like most other nations on earth, the Liberal government of
Canada has had a long fight with counterfeit bills. The Bank of Canada has in
2000, halted the printing of the $1,000 bill. The larger currency notes have
been a favorite of criminals. They have been used by money laundering rings,
for tax evasion schemes, and as counterfeits. The bank has also introduced new
bank notes with enhanced security features to cut down on forgeries.

Fake Canadian Dollars A Prevalent Problem

This move, however, has not slowed the counterfeit rings down. There have been various calls made to Canadians to watch out for fake $100 polymer bills.  The note launched in 2011 as part of the Bank of Canada‘s upgraded bank bills has improved security elements. At the onset, the new notes did help curb the counterfeit notes rates, but it has not taken long for criminals to catch up.

However, most users just do not carry around $100 bills anymore. They visit either the ATM or bank for smaller $20, $10 or $5 bills. According to Prof. Werner Antweiler, Ph.D. of the University of British Columbia looking at “the Bank of Canada’s banknotes statistics, we see a significant increase in the use of $100 banknotes. The $100 banknote is the instrument of choice of the illicit economy because it is easy to carry and hide. High-denomination banknotes facilitate tax evasion, money laundering, and other types of criminal activity. Still, the Bank of Canada reported in 2017 that 51 percent of all sales in Canada are still using cash“.

The future, nonetheless, is cashless. Canadians will either need their high-interest charge credit cards or mobile crypto payments to pay for their favorite goodies if they do not have fiat in smaller bills. 

The post Bitcoin Blinkers, Deluge Of Fake Canadian Notes Force Tim Horton to Reject $100 Bills appeared first on Ethereum World News.

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Canadian Startup Wants to Upgrade Millions of ATMs to Sell Bitcoin

Canadian crypto exchange Coinsquare announced an initiative to turn “millions” of ATMs to bitcoin teller machines.

Canadian exchange Coinsquare has acquired software allowing traditional ATMs to sell cryptocurrency such as bitcoin (BTC), according to a press release on July 3.

Coinsquare announced a controlling investment in Just Cash, a United States-based fintech startup that has developed a software that allows users to purchase crypto directly through traditional ATM machines without the need of additional hardware or mobile application.

Following the investment of undisclosed amount, the Just Cash team will join Coinsquare in and operate under Coinsquare brand.

Coinsquare CEO Cole Diamond says that the new initiative reflects the company’s mission of bringing mainstream adoption to the crypto industry. According to Diamond, enabling crypto purchases through ATMs will make cryptocurrency “finally reach the masses.”

Though the press release does not specify how many ATMs Coinsquare is targeting for the upgrade, the startup nevertheless can now offer crypto capabilities for millions of existing ATMs around the world. 

Diamond notes: 

“By using the millions of existing ATMs around the world, we can now bridge the gap and give new users the easiest and most familiar experience to purchase cryptocurrency. Bitcoin is new and unfamiliar to many, but ATMs are not.”

The news comes amid a recent report on Canada’s city of Vancouver considering a ban of specialized bitcoin ATMs (BTMs) due to money laundering concerns.

Earlier this year, Coinsquare announced the launch of its own stablecoin backed by the Canadian dollar (CAD). In late 2018, the company expanded its business to 25 countries in Europe, prior to reports that Coinsquare laid off around 30% of its employees in January 2019.

In late June, Cointelegraph reported that the total number of BTMs reached 5,000 in about 90 countries.

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Canadian Blockchain Company Signs Contract with Seoul Ministry of Transportation

The Canadian firm Graph Blockchain Inc has partnered with Seoul’s transportation ministry.

Canadian tech firm Graph Blockchain Inc. has partnered with the Ministry of Transportation in Seoul, South Korea, to run a pilot program for blockchain-based traffic data storage, according to a news release on June 24.

Graph Blockchain reportedly signed a contract for around $55,000 CAD, or approximately $41,695 at press time, to run this pilot program as part of the “Smart City initiative.” 

According to the CEO of Graph Blockchain, Jeff Stevens, the company intends to use its blockchain solution to “streamline and protect” traffic data. Graph Blockchain purportedly uses the open source Hyperledger Fabric framework to develop its blockchain solutions. 

Near the end of 2018, Seoul’s mayor, Park Won-soon, announced the “Blockchain City of Seoul”: a five-year plan to grow the blockchain industry in South Korea’s capital. Park also remarked that blockchain solutions would be integrated into Seoul’s administration systems, including a voting system, charity management, and vehicle history reports. In May, Park further announced integration of blockchain tech into its citizen ID cards. 

As previously reported by Cointelegraph, South Korean banks are also developing blockchain-based solutions, but are not supporting the use of cryptocurrency. Korean crypto influencer Hyun-sik ‘Soso’ Choi commented, saying:

“Korean banks are jumping into the blockchain field. While this proves there is huge interest in the technology from traditional finance, all the attempts are on the tech side. They are ignoring the cryptocurrency part.”

Soso cites governmental support for blockchain innovations, but not cryptocurrencies, as one of the main reasons for the banks’ current approach.

South Korea currently has a ban on initial coin offerings (ICOs), as does China. Japan, however, remains as one of the East Asian countries currently attempting to regulate ICOs, keeping coin offerings and crypto exchanges legal.

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QuadrigaCX Co-Founder Used User Deposits for His Own Trading, Created Fake Accounts

The exchange’s deceased owner was transferring user funds off the exchange and using them in his own margin trading on other platforms.

The deceased owner of the now-defunct Canadian crypto exchange QuadrigaCX was allegedly transferring user funds off the exchange and using them as a security for his own margin trading on other platforms.

The news was revealed in the fifth report from court monitor Ernst & Young (EY), filed on June 19 with the Supreme Court of Nova Scotia.

EY has outlined its principal concerns in relation to the exchange, noting that its operations were “significantly flawed from a financial reporting and operational control perspective.”

In addition to most of the activities being directed by a single individual — the now-deceased co-founder Gerald Cotton — EY notes that there was neither segregation between duties and basic internal controls, nor any segregation of assets between Quadriga’s and user funds.

In this context, EY adds, Quadriga did not have any visibility into its profitability. Users’ crypto, the report states, was not exclusively maintained in the exchange’s wallets. Moreover:

“Significant volumes of Cryptocurrency were transferred off Platform outside Quadriga to competitor exchanges into personal accounts controlled by Mr. Cotten. It appears that User Cryptocurrency was traded on these exchanges and in some circumstances used as security for a margin trading account established by Mr. Cotten.”

In addition, Cotten reportedly created fake “identified” accounts on Quadriga under multiple aliases “into which unsupported Deposits were deposited and used to trade within the platform.” This, EY, states, resulted in “inflated revenue figures, artificial trades with Users and ultimately the withdrawal of Cryptocurrency deposited by Users.”

In his trading on competitor exchanges, EY notes that Cotten incurred trading losses and incremental fees that subsequently adversely affected Quadriga’s cryptocurrency reserves.

Notably, EY says it has been unable to confirm the identity of wallet holders to which substantial sums of crypto were transferred. As of the filing date, a reported 76,000 users are owed a combination of fiat and crypto by Quadriga, at an aggregate value of CD$214.6 million ($162.2 million).

Competitor exchanges reportedly received multiple forms of crypto from Quadriga wallets from 2016-19 including 9,450 bitcoin (BTC), 387,738 ether (ETH) and 239,020 litecoin (LTC).

The report outlines in detail the crypto transfers and liquidations that EY identified from Quadriga to date, with varying success — among which CD$80 million ($60.5 million) in BTC remains unaccounted for, having been sold via an unnamed third-party exchange.

As previously reported, Quadriga had initially filed for creditor protection when — following the death of its co-founder Gerald Cotten — the exchange ostensibly lost access to its cold wallets and corresponding keys that allegedly held the assets owed to its clients.

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Accenture to Sign Blockchain ID Deal With Canada, Netherlands and Aviation Players

A senior executive at the firm revealed a deal was weeks away from becoming official after over a year of preliminary work.

Global accounting giant Accenture will sign a formal deal with Canada, the Netherlands and other parties to use blockchain in identifying travelers. The company’s managing director of capital markets, David Treat, confirmed the move at the Synchronize Europe conference in London on June 18, attended by a Cointelegraph correspondent.

Part of its expanding activities in the blockchain sector, Accenture will team up with the Canadian and Dutch governments, as well as Air France-KLM, Air Canada and several airports under a new agreement.

Treat will personally ratify the deal, called “Known Traveller Digital Identity,” which aims to tailor travellers’ experiences using biometric data, in around two weeks’ time.

“If I’m able to take my user-controlled identity, decide that I actually want to share, so that I can get hyper-personalized service. I want to share aspects of my preferences, my identity with those players […] in my journey, can I get a better service?” he explained during a presentation.

The rollout of blockchain-based ID will effectively allow travellers to inform customs and border control of their biometrics, along an itinerary of their movements, in advance.

The scheme originally surfaced in early 2018 around the World Economic Forum, with officials highlighting the need to coordinate traveller data.

“Innovation is key to enhancing global competitiveness, mobility and productivity,” Canada’s Minister of Transport, Marc Garneau, commented at the time. He added:

“Leveraging new technological advancements can support risk-based approaches to public safety and security, making air travel more efficient while improving the travel experience.”

Blockchain has already found other inroads into aviation in particular, with both Air France-KLM and Accenture itself highlighting its potential.

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Canadian Pharmacy to Track Cannabis via Blockchain in New Pilot Program

Blockchain technology is now being used in a pilot program for tracking cannabis supply chains.

Canadian pharmacy chain Shoppers Drug Mart has partnered with blockchain company TruTrace Technologies Inc. to launch a pilot program for cannabis supply chain tracking via blockchain, according to a report by Bloomberg on June 17.

According to the report, this blockchain tracking system will be used to identify and track medical cannabis, with data included such as the strain’s source and genetics. This data will purportedly allow doctors to issue more effective prescriptions, as well as provide robust information for medical marijuana clinical trials.

Shoppers Drug Mart executive Ken Weisbrod commented on how this new level of specificity can help, saying:

“They can say, ‘This particular product, strain, cultivar has this chemistry component and my patient is consistently on this drug and he’s gotten great outcomes […] Then we can start triangulating that data. This is a huge leap for the industry.”

The motivation behind the tracking system is to assuage the concerns of patients and doctors alike, by “mak[ing] it more like traditional medicine,” says Weisbrod.

Commenting on TruTrace’s motivations, the firm’s CEO Robert Galarza said that he hoped the company’s recent partnership with Shoppers Drug Mart can be parlayed into similar arrangements with American pharmacy chains CVS and Walgreens, which already sell cannabis-based products.

As previously reported by Cointelegraph, Colorado-based Internet of Things car security firm CyberCar partnered with cannabis supply chain software company Webjoint in 2017 to use a blockchain-based car tracking system for cannabis deliveries.

According to the report, the blockchain system would track drivers and vehicles automatically. Webjoint CEO Chris Dell’Olio commented on how CyberCar’s driver tracking would help its business, saying:

“Compliance reporting has always been the largest hurdle for the cannabis industry. With CyberCar embedded in our solution, we are able to totally automate all municipal and state reporting requirements.”

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Canadian University to Issue Blockchain-Based Diplomas to Class of 2019

The Southern Alberta Institute of Technology has partnered with blockchain marketplace ODEM to issue blockchain copies of diplomas for 4,800 students.

A Canadian tech institute will issue blockchain-based diplomas to its next graduating class, according to an official press release on June 13.

The Southern Alberta Institute of Technology (SAIT) has partnered with blockchain marketplace ODEM (On-Demand Education Marketplace) to provide blockchain-based copies of student diplomas for SAIT’s graduating class of 2019.
SAIT’s class of 2019, which is made up of over 4,800 students, will reportedly be able to use blockchain technology to share their official diplomas as needed, circumventing the need for alumni to request official documents from SAIT to send to recruiters and employers.

The students will receive the digital version of their certifications in tandem with a traditional paper copy.

ODEM CEO Richard Maaghul commented on how this gives students ownership of their diplomas, saying:

“We believe that students should have control over their own records, and blockchain technology makes that possible.”

The blockchain records will purportedly make the hiring process easier for employers, too, since they can easily verify the credentials of SAIT alumni as genuine.

ODEM and SAIT’s reportedly ran a pilot project in December, in which they used the Ethereum blockchain to test the process of issuing blockchain-based diplomas. 25 participants were drawn from the Pre-Employment Automotive Service Technician program.

Universities in other countries, such as Bahrain and Malta, have also begun to issue and store diplomas on blockchains. The University of Bahrain in particular announced that it was partnering with the startup Learning Machine to provide its blockchain diplomas.

Meanwhile in Malta, the entire country is set to store all educational certificates on a blockchain. The Maltese government partnered with Learning Machine as well, running a two year pilot program to keep certification records from all Maltese schools on a blockchain; this included certificates issued by churches, independent schools, and secondary schools in the country.

As recently reported by Cointelegraph, another university in Canada, the University of British Columbia, has begun a blockchain training program for its graduate- and PhD-level students. The program aims to train 139 students, over a six year period, to understand blockchain solutions for the following areas: health and wellness, clean energy, regulatory technology and Indigenous issues.