Crypto Resource Update April 2024

MT
McCarthy Tétrault LLP
Contributor
McCarthy Tétrault LLP provides a broad range of legal services, advising on large and complex assignments for Canadian and international interests. The firm has substantial presence in Canada’s major commercial centres and in New York City, US and London, UK.
McCarthy Tétrault introduced several new resources this month which will be of interest to those of you working in the crypto asset space.
Canada Technology
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McCarthy Tétrault introduced several new resources this month which will be of interest to those of you working in the crypto asset space.

Budget 2024: Financial Institutions Update

The 2024 federal budget includes tax reporting obligations for crypto asset intermediaries in respect of their customers and transactions. Budget 2024 proposes to implement the framework of the Organisation for Economic Co-Operation and Development (OECD) for the automatic exchange of tax information relating to crypto-asset transactions, referred to as the Crypto-Asset Reporting Framework (CARF), in Canada. The proposed framework will require certain crypto asset service providers that are resident or carry on business in Canada to collect and report information on an annual basis in respect of their customers and crypto assets transactions.

In addition, Budget 2024 includes amendments to OECD's Common Reporting Standard (CRS) that will expand the scope of CRS to central bank digital currencies and certain specified electronic money products. The Government indicates that there will also be amendments to "ensure effective coordination between the CRS and the CARF and limit instances of duplicative reporting between the two frameworks" as well as to "require that additional information be reported in respect of financial accounts and account holders". Notably, the proposed CRS amendments implicitly recognize that transactions in "specified electronic money products" are different from transactions in other types of crypto assets and should be reported under CRS, and not CARF. Each CRS-adopting jurisdiction (including Canada) would prescribe "specified electronic money products" under local regulations, and we expect this category to include fiat-backed stablecoins that are issued in compliance with local regulations in the jurisdiction. This distinction reflects the emerging global approach to regulate fiat-backed stablecoins under a different regime from other crypto assets, and it is fit for the purpose of regulating electronic money, as opposed to securities.

Details regarding CARF and the CRS amendments relevant to crypto asset intermediaries are set out in our blog post Budget 2024: Financial Institutions Update under "Crypto-Asset Taxation Updates".

Law Over Borders Cryptoassets Comparative Law Guide

McCarthy Tétrault is proud to have contributed to the Law Over Borders Cryptoassets comparative law guide. Published by The Global Legal Post, this online resource provides a practical overview of the law regulating crypto assets in key jurisdictions around the world.

It covers issues such as licensing and anti-money laundering requirements, the regulation of crypto asset promotion, rules governing crypto bankruptcy and insolvency, the legal treatment of DAOs and smart contracts, and provides insights into proposed legal reforms in this complex and rapidly evolving space.

The chapter highlights our multi-disciplinary expertise which qualifies us to advise crypto asset industry participants on all aspects of their businesses and activities.

Click here to read the Canadian chapter.

To view the original article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Crypto Resource Update April 2024

Canada Technology
Contributor
McCarthy Tétrault LLP provides a broad range of legal services, advising on large and complex assignments for Canadian and international interests. The firm has substantial presence in Canada’s major commercial centres and in New York City, US and London, UK.
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