Budget 2014: Bitcoin, charities face scrutiny to prevent money laundering

Virtual currency bitcoin is in line for special scrutiny in this year’s budget to ensure it can’t be used to launder money or finance terrorism.

Ottawa turns its eye to virtual currencies that may be used by criminals and terrorists

Tuesday's federal budget puts a special focus on virtual currencies, such as bitcoin, and online casinos as possible sources of funding for organized crime and terrorist organizations. (Jonathan Hayward/Canadian Press)

Virtual currency bitcoin is in line for special scrutiny in this year’s budget to ensure it can’t be used to launder money or finance terrorism.

The move is part of a sweep of measures aiming to sever possible links between domestic organizations, such as charities, sports groups and online casinos, and organized crime or terrorists.

“It is important to continually improve Canada’s regime to 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 budget document says.

The plan is to change laws and regulations so crime syndicates and terror groups can’t make use of bitcoin or online casinos to keep their illegal operations running under the radar.

Senior officials said these measures weren’t brought in because of a specific threat or incident, but rather to ensure the government is prepared for a potential problem. The changes came out of a finance committee report on money laundering.

The government also wants to keep an eye out for money coming into Canada through charities and amateur sports organizations from state sponsors of terror.

The Financial Transactions and Reports Analysis Centre of Canada, also known as Fintrac, will play a big role in monitoring this type of potential activity.

Ottawa will give Fintrac up to $23 million over the next five years to help it with its new responsibilities.

Although charities are in for closer scrutiny, the government is also proposing to help make their tax filings easier.

Ottawa plans to give the Canada Revenue Agency $23 million over five years to update its systems so charities can save money by filing their tax returns electronically.

On top of this, charities will now also be allowed to run lotteries using modern technology. That move will require an amendment to the Criminal Code, but once that is done charities will be allowed to sell tickets electronically.


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