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Regulatory Overview: Money Services Business license in Canada for crypto

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.

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 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.

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!

What are the application requirements for a Canada Crypto License

Your first step to registering a crypto business in Canada is to acknowledge what has to be done and fulfilled first.

Duration	3-5 months
Local office	Yes (MSB, not for FMSB)
Local director	Recommended
Accounting and auditing	Yes
Economic substance	Yes (MSB, not for FMSB)
Government fee	No
Corporate income tax (CIT)	15% + provincial tax
Withholding tax (WHT)	25%

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.

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.

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.

What is the step-by-step crypto licensing process in Canada?

Starting a crypto business in Canada can be dubbed as simple but not easy. The process is comprehensive and clear, still, it requires conscious legal work and a high level of compliance. The MSB license does not necessarily require a lot of financial means, but does require a very serious project management.

The processing time for obtaining an MSB license can take from a few weeks to several months depending on the completeness of the application.

STAGE1 2-4 weeks

(OPTIONAL) SET UP A COMPANY IN CANADA

There are two alternatives to get licensed in Canada. The Money Service Business framework, per opposition to the Foreign Money Service Business framework, requires an actual establishment within Canada.

Registration of a Limited Liability Company in Canada
Advising on choosing the right province for registration
Opening of an office space
Relocation of the team to make Canada the actual place of business
Accounting and administrative requirements
Tax registration
Canadian companies must have a local office and staff in Canada to apply for the MSB license.

STAGE2 4 weeks

PREPARATION OF THE FINTRAC REQUIREMENTS FOR GETTING THE LICENSE

The Financial Transactions and Reports Analysis Center of Canada (FINTRAC for short) is the appointed institution for regulating Money Service Businesses, through the Act. The same law, along with FINTRAC guidelines, describes the requirements to successfully apply for the MSB/FMSB license.

Appointment of a Compliance Officer (it is mandatory for applicants to appoint a Compliance Officer who must possess appropriate professional qualifications)
Preparation of a Compliance Program with AML-CFT policies and KYC procedures
Monitoring and reporting system in line with the FINTRAC guidelines
Enforcement of the Act rules in the internal systems
Documents required for the licensing process include compliance reporting information, bank account details, registration form and employee numbers.
Canadian companies must have a local office and staff in Canada to apply for the MSB license. The application preparation for a Canadian crypto license generally takes about 3 to 4 weeks.

STAGE3 4 weeks

APPLICATION FOR THE MSB LICENSE DIRECTLY TO FINTRAC

Once the Canadian or foreign company is compliant with all the requirements laid out in the Act and in the FINTRAC guidelines, the application is carried out online within the FINTRAC’s MSB Registration System.

Submit information pertaining to the corporate structure
Present the compliance officer
Disclose information about owners and directors of the company
Financial projections (estimates)
Duly filled forms
Upload all the required documents (Compliance Program, etc)
Once the application is submitted, FINTRAC provides a response within 2 weeks after all documentation is complete. This is also the stage where it is advised to start negotiation with financial institutions for opening a corporate account, if required.

Crypto Licenses in Canada