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Canada includes crypto in AML rules, BTC rallies

By Daniela Ešnerová


Updated

Coin with bitcoin (BTC) logo and Canada flag
“Thanks Canada,” wrote cryptocurrency analyst Matthew Hyland, showing a chart depicting bitcoin’s value going up following the announcement – Photo: Shutterstock

Bitcoin (BTC) was touching $44,000 in London morning trade, after cryptocurrency regulation news from Canada sparked an interesting market reaction.

On Monday, Canada invoked its Emergencies Act, which enables banks to freeze accounts without a court order. The action follows the Canadian government’s efforts to cut donations for the ongoing trucker blockades in the capital. Freedom Convoy 2022 is a trucker-led protest against vaccine mandates. At the end of January, hundreds of vehicles in convoys took to Ottawa to rally at Parliament Hill, the seat of the federal government. 

Supporters donated more than $10m for the protesters, but crowdfunding platform GoFundMe distributed only around $1m of the funds, and chose to return the remainder of the money to its donors, citing police reports of violence during the protests.

Bitcoin evangelists began sending BTC to protesters and last week the donations reached 21 BTC, or around $1m.

Emergency powers to freeze accounts

Yesterday, Canada enacted emergency powers, which could now see banks and other financial institutions freezing people’s accounts without requiring a court order. 

“First, we are broadening the scope of Canada’s anti-money laundering and terrorism financing rules so that they cover crowdfunding platforms and the payment providers they use. These new rules include digital assets such as cryptocurrencies,” said Canada’s deputy prime minister and minister for finance, Chrystia Freeland.

“The illegal blockades highlighted the fact that crowdfunding platforms and some of the payment service providers they use are not fully captured under the Proceeds of Crime and Terrorism Financing Act.”

UNI/USD

10.54 Price
-5.340% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.08964

BTC/USD

67,458.40 Price
-1.370% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

ETH/USD

3,752.55 Price
-2.110% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

XRP/USD

0.53 Price
-0.700% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

Canada’s prime minister, Justin Trudeau, added: “In addition, financial institutions will be authorised or directed to render essential services to help address the situation, including by regulating and prohibiting the use of property to fund or support illegal protests.”

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Unintended consequences

Cryptocurrency advocates and others took to social media to comment on the unintended consequences of Canada’s clampdown. “Thanks Canada,” wrote cryptocurrency analyst Matthew Hyland, showing a chart depicting bitcoin’s value going up following the AML and crime financing announcement. 

Commenting on Trudeau’s announcement, Samson Mow, chief strategy officer of blockchain technology provider Blockstream, wrote on twitter: “Basically a Super Bowl ad for bitcoin in Canada.”

“Why we need a decentralised, censor-free, borderless currency: bitcoin. Canada now can freeze or suspend accounts and money without a court order,” economist Marc Friedrich wrote.

Top cryptocurrency coins by market capitalisation

As of 10:30 UTC: 

Winners and losers

  • The graph (GRAPH) and gala (GALA) were among the altcoins that benefitted handsomely from the latest rally, adding 18.57% and 18.47% respectively over the past 24 hours.
  • Near protocol (NEAR) is down 12.80% week on week, while filecoin (FIL) has lost 12.52% over the same period.

Markets in this article

BNB/USD
Binance Coin / USD
600.84 USD
-6.71 -1.120%
BNB/USD
Binance Coin / USD
600.84 USD
-6.71 -1.120%
BTC/USD
Bitcoin / USD
67458.40 USD
-937.65 -1.370%
ETH/USD
Ethereum / USD
3752.55 USD
-80.81 -2.110%
FIL/USD
Filecoin / USD
5.9248 USD
-0.1418 -2.390%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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