MONTREAL, Feb. 12, 2015 /CNW Telbec/ - In Québec, businesses operating a virtual currency automated teller machine or a platform for trading virtual currency must obtain a licence issued by the Autorité des marchés financiers (the "AMF") pursuant to the Money-Services Businesses Act (the "Act").
The AMF today published amendments to the Policy Statement to the Money-Services Businesses Act. The amendments are intended in particular to reflect the framework set up under the Act governing certain activities of businesses that operate, for remuneration, automated teller machines and platforms for trading virtual currency in Québec.
Risks associated with virtual currency
Because the AMF oversees such businesses does not mean that it regulates virtual currencies. The fact that a business holds a licence issued by the AMF does not protect consumers from the risks associated with virtual currency, in particular volatility and liquidity risks.
Transactions involving virtual currency are not covered by the financial services compensation fund or the deposit insurance fund. Quebeckers should therefore be careful with virtual currency transactions as they may incur losses that are not covered under current compensation or deposit insurance plans.
The AMF also points out that the anonymity of virtual currency transactions and their relatively low costs may entice fraudsters to set up Ponzi and other schemes to lure investors. Virtual currency may be used to facilitate fraudulent transactions or simply fabricate fraudulent investments. This type of fraud may involve on-line offerings or trading platforms not authorized by the AMF.
Money-Services Businesses Act
Under this Act, which came into force on April 1, 2012, businesses that provide money services, including currency exchange, fund transfers, the issue or redemption of traveller's cheques, money orders or bank drafts, cheque cashing and the operation of private automated teller machines, must obtain a licence of the appropriate class issued by the AMF. The Act also requires that such businesses provide certain information, in particular about the directors, officers and partners of the business as well as its lenders.
The AMF analyzes the applications and issues licences to businesses that show that they have the required integrity and good moral character. It works with the Sûreté du Québec and local municipal police forces in determining whether an applicant meets the requirements.
Businesses governed by the Act have various obligations, including record-keeping and verification of the identity of their customers. A business that contravenes these obligations or commits other offences under the Act can be fined or have its licence revoked.
The Autorité des marchés financiers (the "AMF") is the regulatory and oversight body for Québec's financial industry.
Sylvain Théberge: 514-940-2176
Québec City: 418-525-0337
Twitter : @lautorite
SOURCE Autorité des marchés financiers
For further information: Media only: Sylvain Théberge: 514-940-2176; Information Centre: Québec City: 418-525-0337; Montréal: 514-395-0337; Toll-free: 1-877-525-0337; www.lautorite.qc.ca; Twitter : @lautorite