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Crowdfunding sites must now report transactions to Canada’s financial crimes watchdog

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Ottawa is now requiring crowdfunding sites to register and report transactions to the federal anti-money laundering watchdog in the wake of the trucker convoy protests earlier this year.

In updated regulations published April 27, the government said crowdfunding platforms, which were instrumental in funding the “Freedom Convoy” protests in Ottawa, are now obligated to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

Read more: GoFundMe, GiveSendGo defend handling of convoy blockade fundraising campaigns

Reporting requirements include suspicious transactions and large-value transactions, record keeping and customer due diligence; the platforms must also develop a compliance program, the government said.

“These requirements cover prescribed transactions in both fiat and virtual currency, and apply to domestic entities, as well as foreign entities when they direct their services to Canadians,” the government added.

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The convoy protests that gripped Ottawa in January and February resulted in a near-complete shutdown of the downtown core, which is heavily residential, and lead to dozens of arrests.

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Police eventually cleared out the protests, which included encampments throughout downtown Ottawa.

In March, crowdfunding platforms GoFundMe and GiveSendGo defended their handling of the so-called “Freedom Convoy” blockade fundraising campaigns that put the due diligence done by those platforms and their payment partners under scrutiny by Canadian lawmakers.

The appearances of the platform leaders at a parliamentary committee meeting, alongside leaders from their payment processors PayPal and Stripe, came nearly five weeks after the convoy first arrived in the nation’s capital on Jan. 28.

Read more: Ottawa’s Emergencies Act cracks down on convoy crypto. Experts warn that’s not easy

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The fundraising campaigns saw millions raised, but the government cracked down on the platforms when it invoked the Emergencies Act to bring the convoy to an end. GoFundMe shut off access to funds after the demonstrations were deemed “illegal” by the government and police.

“Canada assessed the risks posed by crowdfunding platforms and payment service providers in its last national inherent risk assessment conducted in 2021, and found the risks posed by these sectors to be medium and high, respectively,” the government said in its regulations update.

“Moreover, the FATF (Financial Action Task Force) has identified crowdfunding platforms as an emerging area of risk for terrorist financing.”

The “Freedom Convoy” occupation was expected to cost the city of Ottawa at least $30 million, officials said earlier in February.

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