Budget will compel crowdfunding platforms to report suspicious transactions
CBC
Popular online crowdfunding platforms and their payment processors will soon have to report suspicious transactions to Canada's money laundering and terrorist financing watchdog.
The policy change, outlined in Thursday's budget, comes in the wake of the anti-vaccine mandate convoy protest that paralyzed downtown Ottawa for three weeks and blocked several border crossings.
Crowdfunding campaigns raised millions of dollars for the protest from donors located in Canada, the United States and around the world.
A campaign on GoFundMe raised $10.1 million for the protest before the company — worried that it might violate GoFundMe's terms and conditions — shut it down. A second Freedom Convoy 2022 campaign hosted by GiveSendGo raised $9.7 million US while the Adopt a Trucker campaign, which is still live on GiveSendGo, has raised $591,440 US.
A separate online crowdfunding cryptocurrency campaign raised more than $1 million for the protest — much of it from anonymous donors.
Most Canadian financial institutions are required by law to report certain transactions to the Financial Transactions and Reports Analysis Centre (FINTRAC), which looks for financial transactions that could be related to money laundering or terrorist financing. But the emergence of online crowdfunding sites since the most recent revision of the FINTRAC law has resulted in them not being covered.
The crowdfunding campaigns for the convoy protest attracted attention because of the speed at which money was raised and the size of some of the six-figure donations from companies and individuals. It also highlighted the fact that crowdfunding platforms were generally unregulated in Canada, and the rules that did exist were largely set by the crowdfunding companies themselves.
In her budget tabled Thursday, Finance Minister Chrystia Freeland said the government will introduce new regulations to expand the existing rules which oblige companies to report things like suspicious transactions or financial transfers of $10,000 or more.
"The federal government is working to bring into force new regulations that extend AML/ATF obligations to payment service providers and crowdfunding platforms," the government wrote. "This will ensure that these businesses are required to monitor and report all instances of suspicious activity that may involve attempted money laundering or terrorist financing."
In separate testimony before the House of Commons Finance committee in recent weeks, officials from FINTRAC and the RCMP said they didn't see any signs of terrorist financing during the truck convoy protest.
When the federal government invoked the Emergencies Act to deal with the protest, it required crowdfunding services to register with FINTRAC. That requirement ended when the Emergencies Act was revoked.
By proceeding through regulation, the government can make the requirement permanent without having to get approval from Parliament.
To allow FINTRAC to add crowdfunding platforms and payment processors to its workload, the budget plans to provide it with an extra $89.9 million over five years and $8.8 million ongoing — a 24 per cent increase in funding and a 13 per cent increase in staffing.
"This increased capacity will enable FINTRAC to implement new anti-money laundering and anti-terrorist financing requirements for crowdfunding platforms and payment service providers; support the supervision of federally regulated financial institutions; continue to build expertise related to virtual currency, modernize its compliance functions; and update its financial management, human resources, intelligence and disaster recovery systems," the government wrote.
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