The federal government's budget act for 2014 passed "first reading" on Friday. It will amend the money laundering regime to create a new category of money services business: "dealing in virtual currencies".

The budget is a whopper of an omnibus bill but the key amendment is at s. 256(2). It adds to the existing categories of regulated businesses (e.g. foreign exchange): "dealing in virtual currencies, as defined in the regulations". I expect the regulations to set a limit of somewhere between $1000 to $3000 for dealing without collecting identity documents.

The effect of this will be to make operating some types of Bitcoin businesses considerably more expensive because anyone who is "dealing" will have to undergo the MSB registration process, implement a compliance regime, etc.

Bill C-31:

Thanks to Amber Scott of Outlier Solutions for bringing this to my attention.