Canada will bring in new anti-money laundering and anti-terrorist financing laws aimed at preventing abuses of virtual currencies such as Bitcoin, the finance minister confirmed Wednesday.
Asked about Bitcoin, a so-called "cryptocurrency" that is gaining in popularity both as an investment and as a way to make online payments, Jim Flaherty said: "We're going to have a look at it."
The Canadian government had announced its plan to tighten rules around the use of virtual currencies in the federal budget a day earlier, but no details were provided.
The budget document said Canada would "address emerging risks, including virtual currencies, such as Bitcoin, that threaten Canada's international leadership in the fight against money laundering and terrorist financing."
The proposed legislation follows recommendations in a March 2013 report by a senate banking committee.
Money laundering is increasingly becoming a cybercrime. Gone are the days when the bad guys would pop down to the casino and hope to convert their loot into a clean win on the roulette table. And less popular is the old scam of taking out an insurance policy and then redeeming it at a discount.
Instead, modern criminals are focusing on the internet. And the opportunities for turning dirty money into a spotless shade of green are plentiful.
So today, Jean-Loup Richet, a research associate at the ESSEC Business School just outside Paris, surveys the new techniques that criminals are using in a report written for the United Nations Office on Drugs and Crime. And he reveals just how creative and opportunistic money launderers have become.
Researching these kinds of operations is inherently difficult. As Richet puts it: “Bad guys and their banks don’t share information on criminal pursuits. “
Instead, he has had to cast his net a little wider. Richet’s main sources of information are online hacker forums where anonymous criminals exchange tips on the best ways to launder money and are surprisingly frank about their methods.
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