Crypto License in Canada – Money Services Business (MSB) License

The crypto license in Canada is called the Money Service Business registration (MSB).

The crypto license in Canada can be described as both comprehensive and enabling. The requirements are set high in regard with the lawful conduct of the activity (meaning consumers are protected, financial crime is prevented and good conducts are adopted). There is no minimum share capital or high entry fees barring the way of startups to get a license.

In the same spirit, foreign companies can apply for an equivalent of the MSB crypto license dedicated to foreign entities operating in the Canadian market, under the name Foreign Money Service Business (FMSB). The requirements are about the same as the domestic MSB license, with an emphasis on disclosing information about the non-Canadian structure.

Certain crypto platforms must register as ‘Restricted Dealers’ with provincial regulators if they offer tokens considered securities.

• Includes multiple money services businesses: as the framework says, dealing in virtual assets is one of various activities allowed by the Money Services Business regulation.
• Very reputable jurisdiction: located in North America, bordering the United States of America, which a very high GDP, English-native speaking country and access to the global market.
• Possibility to register an “offshore” entity: as a Foreign Money Services Business, a crypto company isn’t required to physically establish itself in Canada to operate under the Canadian regulations. The Foreign Money Service Business registration is granted to foreign entities targeting Canadian customers. This includes providing direct services to individuals or entities located in Canada, even if the business is registered or licensed elsewhere.
• Simple and straightforward requirements: proper risk management and communication to the reports analysis centre, as well as proper implementation of Anti Money Laundering regulations are basically what a Canadian MSB must comply with.

The Canada MSB registration is undoubtedly considered as one of the best virtual asset service provider framework, for multiple good reasons:

• Encompasses multiple financial services: the Canadian framework doesn’t limit your business to just dealing with virtual currencies. It allows for other financial activities such as foreign exchange dealing or money transfer services;
• Very reputable jurisdiction: as a North American powerhouse, being registered in Canada is an instant boost of trustworthiness among financial institutions and users of your services;
• Comprehensive AML-CFT framework: Unlike heavier regulations such as MiCA in Europe, the Canadian MSB framework’s regulatory requirements are solely focused to ensure compliance on Anti Money Laundering and Countering Terrorist Financing. While allowing to provide financial services of multiple sorts, the Canadian regulations are lighter than a full fledged financial regulation;
• High flexibility: while acting as a virtual asset service provider license, the MSB framework also open doors to more sophisticated activities including electronic funds transfer, facilitate transactions, foreign exchange transactions, raise funds, virtual currency exchange, virtual currency transfers and the likes;
• Relatively simple process: as for any virtual asset service provider framework focused on enabling business through regulations not too heavy, Canada provides a virtual currency license regulation that is relatively simple. The requirements are accessible and make sense for the rightful conduct of business.

Ready to provide services in cryptocurrency? Canada may be one of the very best regulations for companies engaged in crypto currency exchange, international electronic funds transfer and the likes. Start a conversation with one of our expert today and gain clarity to make the right decision!

Before the application can even be prepared, a crypto project must choose between the two licensing regime of the Money Service Business framework:

• The Money Service Business (MSB) framework is targeted to companies implemented in Canada;
• The Foreign Money Service Business (FMSB) framework is directed at companies not registered in Canada but willing to offer their services in Canada.

This means that a foreign team does not have to register a company in Canada and to domiciliate their operations in the country, to get the MSB license. Unlike many crypto licenses, the Canadian VASP authorization does not require local establishment in the country. The FMSB license however sets the condition that the entity must offer its services in Canada (among other places).

Meeting one of three conditions is enough for FINTRAC to assess that a FMSB company is serving the Canadian market:

• The business’s marketing or advertising is directed at persons or entities located in Canada;
• The business operates a “.ca” domain name;
• The business is listed in a Canadian business directory.

The MSB license is not restricted to crypto activities. FINTRAC defines a certain amount of possible money services, among which:

• Dealing in virtual currency;
• Currency exchange (USD/CAD, for example);
• Remitting or transmitting funds;
• Issuing or redeeming money orders, traveler’s cheques or anything similar (monetary coupons, vouchers, etc);
• Crowdfunding platform services;
• Cheque cashers;
• Armoured cars for transportation of fiat currency;
• Acquirer services in relation to private automated banking machines.

A company can register for as many of these services as is required by its activity.

It is important to note that Canadian MSB crypto businesses are not allowed to operate with stablecoins in any manner, unless they receive additional authorization from the Canadian Securities Administration (CSA). Security tokens are subject to security laws in Canada, additionally.

It is possible to obtain a Canadian crypto license for a foreign entity, provided that it has a business relationship with Canada:

• the Money Service Business registration is granted to Canadian entities;
• the Foreign Money Service Business registration is granted to foreign entities targeting Canadian customers.

Our complete guide to the Money Service Business crypto license in Canada includes all the recent changes. Find out more about how to start a Canadian crypto exchange in the shortest delays.

It is granted by the Financial Transactions and Reports Analysis Center of Canada, better known as FINTRAC.

The authority of FINTRAC and the Money Service Business framework is set in law by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act of 2000, last amended in 2025. This text is regularly updated, about every year, sometimes thrice in a single year. This underlines two things:

• Canada is keeping its AML-CFT laws in line with the Financial Action Task Force (FATF), the international body responsible for setting global standards on anti-money laundering and combating the financing of terrorism;
• Canada is incrementally improving its framework, either on business capacity or consumer protection.

The cryptocurrency regulation in Canada for businesses is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act of 2000, last amended in 2025. This law, published by the Minister of Justice of Canada, establishes the legal foundation of the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC. This agency is the Canadian national institution for prevention of financial crime and enforcement of AML-CFT measures.

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act describes different cases of offenses by persons or entities acting with a Money Service Business license.

Pertaining to financial activities subject to the supervision of FINTRAC, the Act of 2000 details the rules and obligations of entities authorized by the Canadian regulator, with an explicit emphasis on anti money laundering and countering the financing of terrorism (AML-CFT).

The law provides a clear overview of the requirements and obligations of a money or crypto business registered in Canada. It explicitly states the obligation to register for an authorization, in order to provide money services (including crypto). The Act describes who is eligible to register as a MSB and how the licensing process goes with FINTRAC.

The Act is frequently revised and updated, hence the importance of relying on transparent and up to date information before starting the process to obtain a crypto license in Canada.

The Act also does not dive deeply into the details of the requirements. More accurate and complete resources can be found on the website of FINTRAC. Numerous guidance directives are available directly online, which explain all the obligations of the MSB license, such as KYC rules, transaction reporting procedures, application of the travel rule, etc.

The crypto MSB license in Canada is granted under the condition that the applicant fulfills the requirements described in the FINTRAC’s guidelines, in addition to complying with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

MSB and FMSB are then confronted to meet the same requirements pertaining to their operations and their compliance with the rules and regulations. FINTRAC breaks down its expectations into 7 categories of programs and documents to prepare:

• Registration with FINTRAC;
• Preparing a Compliance Program;
• Enforcing the rules pertaining to “Know Your Customers” regulations;
• Setting transaction reporting mechanisms;
• Properly keeping records of the client activity on the service;
• Enforcement of the Travel rule;
• The following of Ministerial directives (for example, sanctions against a country).

All of these subitems have their own requirements in terms of documentation to produce and provide to FINTRAC during the application process.

The Compliance Program, for example, requires the appointment of a Compliance Officer. This officer must be a senior officer or a member of the administrative board of the company. This person should have a clear view on the company’s operations and a clear understanding of the AML-CFT practices.

• Having a legal entity in Canada (for MSB) or out of Canada (for FMSB);
• Serving Canadian clients or planning to (with concrete actions);
• Appointment of a competent Compliance Officer;
• Registration of the business to FINTRAC;
• Strong Compliance Program (AML-CFT policies, KYC rules, etc);
• Setting proper records keeping mechanisms;
• Transaction reporting system set to flag different sorts of suspicious activity;
• Detailed business plan;
• Register for the relevant activities to be conducted during the application process.

Canada’s crypto regulation is notorious for not having either registration fees, annual fees nor a minimum authorized capital.

• No fees to get the license
• No fees to maintain the license
• No minimum capital requirement

What matters to FINTRAC, the Canadian regulator, is how compliant your business is with preventing financial crimes and properly implementing risk management.

Due compliance against money laundering and terrorist financing obviously has a cost, but an experience legal partner such as LegalBison can significantly relieve the workload and cost.

The taxation of companies in Canada depends on the company’s province of registration and its activity. The base rate at the national level is 38% of the taxable income. This rate is then diminished by a 10% federal rate abatement. An additional 13% reduction further applies.

On the provincial level, another income tax will apply to companies, depending on the province. Each province applies its own corporate taxation. The range varies between 8% (in Alberta) and 16% (Prince Edward Islands), with major provinces such as Quebec, Ontario or British Columbia applying rates of 11.5% or 12% in the case of the latter.

The effective tax rate for a Canadian crypto company will then be 15% + the rate applicable at the provincial level. For tax and regulatory purposes, all cryptocurrency transactions must be valued and reported in Canadian dollars, as cryptocurrencies are treated as commodities rather than legal tender in Canada.

Foreign Money Service Businesses are not subject to Canadian taxes.

The VASP license is required for companies providing financial services using virtual assets, such as cryptocurrency exchanges and wallet services.

Crypto companies in Canada whose application is successful will receive a MSB or FMSB license for a duration of 2 years. Every 2 years, the license must be renewed. This process is currently free of charge.

The process of obtaining a VASP license includes preparing necessary documents, implementing AML/KYC measures, and submitting an application to the regulatory authority.

To renew the license, a Money Service Business must proceed to a review of its compliance documents. This review will assess that the company is compliant with the regulation, given that the Act is amended frequently and the regulation is evolving.

Proper preparation of financial statements and documentation of all audits and correspondence with clients is a mandatory requirement for VASPs and money transfer services companies under the MSB framework.

This assessment checks all the AML and KYC policies and procedures in place and their good enforcement. The complexity of the assessment depends on the business and the risks associated with its activities.

In its day to day basis, a Money Service Business is obligated to enforce its AML-KYC policies and procedures. For example, identifying customers at the beginning of the business relationship, monitoring transactions in the case of an exchange and flagging the suspicious activity for review by FINTRAC, with a maximum of details.

Under Canadian regulations, VASPs must conduct regular reporting to financial and supervisory authorities to ensure ongoing compliance.

Canada enforces the Travel Rule for transactions exceeding CAD 1,000, requiring VASPs to collect and share sender and receiver information.

No, the MSB framework doesn’t equate a Forex license. The regulated MSB activity is “Foreign exchange dealing” (e.g., exchanging CAD for USD). “Forex trading” (as in offering leveraged contracts for difference on currency pairs) is a derivatives or securities activity that falls under provincial securities regulators, not FINTRAC.

No, an external audit of the compliance program every two year is not what is required by the law. The regulation requires a compliance program that includes an effectiveness review every two years, but it does not mandate that this review be “external.” FINTRAC guidance allows this review to be conducted by either an internal or external auditor, as long as they are independent of the compliance program itself.

No, “wallet services” or “storage services” aren’t specific activities with a defined registration to FINTRAC. The law defines the regulated activity as “dealing in virtual currency,” which includes “virtual currency exchange” and “virtual currency transfer services”. The provided sources do not list “wallet services” or “storage” as a standalone MSB activity. A company that only provides storage (a non-custodial wallet, for example) would not be required to register as an MSB.

No, cryptocurrency is not legal tender in Canada. The Canadian dollar is the one fiat currency officially in use for Canadian citizens, persons or entities.

No, offering custody of crypto assets on behalf of clients doesn’t require additional registration. FINTRAC (the MSB regulator) absolutely does regulate custodial crypto exchanges, as they are clearly “dealing in virtual currency”. The requirement to also register with provincial securities regulators is a separate, parallel obligation because those regulators often consider the custodial arrangement to be a “crypto contract” and therefore a security.