Large Virtual Currency Transaction Report (LVCTR): What Canadian MSBs Need to Know

Canadian anti-money laundering laws have expanded to cover cryptocurrency transactions in recent years. Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and FINTRAC regulations, Large Virtual Currency Transaction Reports (LVCTRs) are now a mandatory part of compliance for businesses dealing in crypto assets. In this expert guide, we break down what an LVCTR is, who must file one, and how to meet all the requirements. Geared toward fintech and crypto Money Services Businesses (MSBs) in Canada, this article explains the $10,000 CAD reporting threshold, aggregation rules, step-by-step filing via FINTRAC’s system, triggers for reporting, identification and recordkeeping obligations, deadlines, and consequences for non-compliance – all in the context of Canadian law (FINTRAC and PCMLTFA). Practical examples and best practices are included to help your MSB stay on the right side of regulations.

What is an LVCTR and Who Must File It?

An LVCTR (Large Virtual Currency Transaction Report) is a mandatory report that certain businesses must submit to FINTRAC (Canada’s financial intelligence unit) whenever they receive a large virtual currency transaction. In simple terms, it’s the cryptocurrency equivalent of a large cash transaction report. The requirement was introduced as part of Canada’s AML regulations effective June 1, 2021, when dealing in virtual currency became explicitly regulated.

Who must file? Only regulated reporting entities are obligated to submit LVCTRs – in practice, this primarily means registered MSBs in Canada that deal in virtual currencies. After the 2020–2021 AML amendments, any business (domestic or foreign) “dealing in virtual currency” – such as crypto exchanges, brokers, ATMs, or payment processors – must register with FINTRAC as an MSB and implement a full compliance program. These registered crypto-MSBs are required to file LVCTRs. (Other types of reporting entities, like banks or securities dealers, also have to report if they receive large crypto transactions, but this guide focuses on MSBs.) If your Canadian business isn’t registered as an MSB, it cannot legally offer crypto exchange or transfer services, and thus would not be in a position to file LVCTRs. In short, if you are a Canadian MSB handling cryptocurrencies, you are subject to LVCTR obligations under PCMLTFA and FINTRAC’s rules.

The $10,000 Threshold and the 24-Hour Aggregation Rule

Threshold: A large virtual currency transaction occurs when your business receives an amount of virtual currency equivalent to CAD $10,000 or more in a single transaction. This threshold is based on the value in Canadian dollars at the time of the transaction. “Virtual currency” includes cryptocurrencies like Bitcoin, Ethereum, USDT, etc., essentially any digital currency that can be used for payment or investment and easily exchanged for funds. (It does not include things like loyalty points or in-game tokens that are not readily convertible to money.)

Aggregation (24-hour rule): Importantly, multiple smaller crypto transactions can aggregate to trigger a report. If you receive two or more payments that add up to $10,000 or more within a 24-hour period, and they are by or on behalf of the same person or entity (or for the same beneficiary), you must treat them as a single large transaction and submit an LVCTR. FINTRAC calls this the “24-hour rule.” For example, if the same client sends you 5 BTC in the morning and 3 BTC in the afternoon (and together their value exceeds $10k CAD), it crosses the threshold. You would report it as one combined transaction (with details of each component) in an LVCTR. The rule prevents avoidance of reporting by breaking down a large amount into smaller chunks.

How the 24-hour window works: FINTRAC measures a 24-hour period on a rolling basis from the time of first receipt, or in some cases by calendar day (midnight to midnight) in Eastern Time. For simplicity, best practice is to aggregate all transactions by the same client within the same calendar day if the total meets or exceeds $10,000. Be sure to include the time zone when indicating the 24-hour period in your report. If in doubt, consult FINTRAC’s detailed 24-hour rule guidance.

When is a transaction “received”? A nuance for crypto: you are considered to be “in receipt” of virtual currency once the transaction can no longer be reversed or cancelled. In blockchain terms, that usually means waiting for sufficient network confirmations. For instance, if you require 3 confirmations for a Bitcoin deposit to be final, that’s the point at which the amount is “received” for reporting purposes. At that time, if the confirmed amount is ≥ $10k CAD (alone or aggregated), the clock starts ticking for reporting.

Currency conversion: Because crypto values fluctuate, you must use a consistent exchange rate method (your normal business practice) to convert the crypto to Canadian dollars and determine if it meets $10k. The Bank of Canada doesn’t post crypto rates, so you might use market prices from a reputable exchange or an average rate, as long as your method is documented in your compliance policies. Ensure your calculation is recorded – this demonstrates how you decided the transaction met the threshold.

Types of Transactions that Trigger an LVCTR

Only certain types of transactions create an LVCTR obligation – specifically those where your business is on the receiving end of virtual currency valued at $10,000+. Here are common scenarios for crypto MSBs in Canada:

Customer Deposits Crypto to an Exchange or Platform: If a client transfers cryptocurrency into your exchange platform account (for example, a wallet deposit of Bitcoin, Ether, USDT, etc.), and the amount is $10k or more, you must file an LVCTR. This applies whether the deposit is to fund trading or for custody. Even if the client sends multiple smaller deposits that together reach $10k in 24 hours, it’s reportable under the aggregation rule.
Client Sells Crypto for Fiat (Crypto Brokerage): When a customer uses your service to cash out crypto (meaning the customer gives you crypto and you give them fiat in return), your business is receiving that crypto. For example, a client brings in 1.5 BTC to your brokerage to sell for dollars – if that BTC is worth ≥ $10k, you must report it. The report would capture the incoming crypto from the client.
Crypto ATM (Two-Way ATM Machines): Many Bitcoin ATM operators allow both buy and sell. If a user sends crypto to the ATM (often to receive cash payout), the ATM operator (MSB) is receiving the crypto. So a large amount received via the machine triggers an LVCTR. E.g., a user sends $12,000 worth of BTC into the ATM’s wallet to withdraw cash – the operator must report that as a large virtual currency receipt. (Conversely, if a customer inserts $12,000 cash to buy BTC from the machine, that’s a large cash transaction for the MSB, not a large virtual currency receipt, so an LVCTR would not apply – but a Large Cash Transaction Report might, in that scenario.)
Crypto Transfers / Remittances: If your MSB business facilitates crypto transfers on behalf of clients (acting like a remittance service or payment processor in crypto), an LVCTR is required when you receive $10k+ in crypto from a client to transfer onward. For instance, a customer hands you 50 ETH to send to their business partner abroad – you’ve received those funds (even if you will forward them), so you must report the receipt of 50 ETH if it’s worth $10k+.
Multiple Small Transactions for Same Client: Any situation where a single client (or related clients) funnels multiple smaller crypto amounts that together reach the reporting threshold will trigger a report under the 24-hour rule. For example, a client breaks a $15,000 transfer into three $5,000 BTC chunks spread over several hours – if you know they’re the same client or beneficiary, you must file one LVCTR covering the aggregated $15k.

In summary, any time your MSB is receiving virtual currency ≥ $10,000 (in value) from a client or on behalf of a client, it triggers an LVCTR. Note that transactions where you are sending out crypto (e.g., giving crypto to a customer who paid you in cash or card) do not require an LVCTR, because you’re not the one receiving the crypto in those cases. The obligation is one-way: it’s always about incoming crypto to the reporting entity. Also, normal business transactions like buying crypto for your own corporate treasury or receiving mining rewards are exempt from LVCTR requirements. FINTRAC specifically exempts virtual currency received for your own purposes (not on behalf of a client) and certain blockchain mining/validation rewards – these do not need to be reported. But anything involving a client deposit or exchange must be evaluated for LVCTR filing.

Identification and Recordkeeping Requirements for LVCTR

Whenever you file an LVCTR, know-your-client (KYC) rules kick in. Canadian MSBs must verify the identity of the individuals or entities involved in the large transaction and keep detailed records. Here’s what that entails:

Client Identification: For any reportable transaction, you must verify the identity of the person conducting the transaction (and any person on whose behalf it’s conducted, if different). FINTRAC’s regulations require reporting entities to verify client identities when conducting large transactions (the same way you would for large cash or wire transfers). In practice, this means if the person isn’t an existing KYCed client, you need to obtain acceptable identification before or at the time of the transaction. Acceptable methods include government-issued photo ID verification, credit bureau checks, or dual-process verification, as outlined in the PCMLTFA regulations. You’ll need the person’s full name, date of birth, address, and ID details (e.g. ID type, number, issuing jurisdiction) for the report. For a business client, you must collect their business registration details and information on ownership (e.g. directors and any 25%+ owners) as part of verifying the entity’s identity and controllers. Essentially, you cannot file a meaningful LVCTR without knowing who sent you the funds, so make sure your onboarding and transaction processes include robust ID steps for large transactions.
Third Parties and Beneficiaries: You also have to determine if the person dealing with you is acting on behalf of a third party. If, for example, Joe is depositing crypto but he tells you it’s actually for Alice (or using Alice’s funds), then Alice is the “third party” who must be identified in the report as the ultimate owner of the funds. FINTRAC expects MSBs to make a third-party determination for large transactions – essentially, ask whether the client is doing this for someone else, and record that other party’s details if so. Likewise, identify the beneficiary of the transaction (often the same as the account holder receiving the crypto). All these parties (conductor, beneficiary, third party) have fields in the LVCTR form.
Information to record in the report: An LVCTR contains a lot of detail. Key data includes: the date and time of the transaction (and of the 24h period if aggregation is involved), the amount and type of virtual currency, and the exchange rate used if you converted to CAD. You must report the originating crypto wallet address (the address from which the funds were sent) and, if applicable, the receiving wallet or account address where the funds went. The form will also capture the method of transaction – in FINTRAC’s terminology, the “starting action” (how the transaction was initiated, e.g. received from a private wallet, or in person, etc.) and the “completing action” (how it concluded, e.g. credited to a client’s exchange account, or converted to cash). For each person or entity involved (client, third party, beneficiary), you’ll include their name, address, date of birth (for individuals), occupation, and the details of the ID you used to verify them (ID type, number, issuing country, etc.). It’s important to be thorough – FINTRAC requires that all applicable fields be completed if the information exists. In fact, if certain information is missing, you are expected to have taken “reasonable measures” to obtain it and still report whatever you did get. Failure to provide required information in the report is considered non-compliance and can lead to penalties.
Recordkeeping: Just filing the report isn’t enough; you also have to retain records. Canadian law mandates that a copy of each LVCTR and the related records be kept for at least five (5) years from the date of the report. This means you should save the submitted report confirmation and maintain all supporting documents (client ID records, transaction receipts, screenshots of the crypto transaction, etc.) in your files. These records must be readily accessible if FINTRAC or auditors request them. Proper recordkeeping is critical – without it, you can’t demonstrate you complied if you’re audited. Most MSBs integrate this into their compliance program by storing electronic copies of each report and linking them to the client’s profile. Ensure that your records of LVCTRs are organized and secure, and mark your calendar for the 5-year retention period before any disposal.

In summary, for each LVCTR you file, you must have identified the client(s) involved and you must keep a detailed record of the transaction and report. This goes hand-in-hand with the reporting obligation and is enforced by FINTRAC. Don’t overlook ID verification – it’s a legal requirement that complements the LVCTR filing.

How to File an LVCTR via FINTRAC’s Reporting System (Step by Step)

Filing an LVCTR may sound daunting, but FINTRAC has an electronic system to make it as efficient as possible. FINTRAC accepts reports through its secure online portal and via batch uploads or API for high-volume filers. Below is a step-by-step guide for MSBs (particularly those with moderate reporting volumes) to file a Large Virtual Currency Transaction Report using the FINTRAC Web Reporting System (FWRS):

Enroll in FINTRAC’s Web Reporting System: Before you can file anything, your organization must be set up in FINTRAC’s reporting portal. If you’re a newly registered MSB, go to FINTRAC’s website and enroll your organization with the FINTRAC Web Reporting System (FWRS). (FWRS was formerly known as F2R – FINTRAC’s secure reporting system.) Enrollment will involve providing your MSB’s identification information and assigning a security officer or point person who will access the system. If your MSB is already enrolled, simply ensure you have your login credentials handy.
Log in to the FINTRAC Web Reporting System: Using your secure credentials (which may include a username, password, and possibly a two-factor token provided by FINTRAC), log in to the FWRS. Once inside, you’ll see a dashboard for report submissions. Make sure you’re using a secure computer and connection, as you’ll be handling sensitive client data.
Select “Large Virtual Currency Transaction Report” (LVCTR): In the FWRS menu, navigate to the section for submitting transaction reports. FINTRAC’s system covers various report types (Suspicious Transaction Reports, Large Cash Transaction Reports, Electronic Funds Transfer Reports, etc.). Choose the option to create a New Large Virtual Currency Transaction Report. This will open the LVCTR electronic form. The form is structured in sections, but the system will guide you field by field.
Complete the General Information Section: Start by filling out the General Information section of the LVCTR form. This includes details about your business (reporting entity) and the time frame of the report:
Your MSB’s details (name, FINTRAC registration number, etc.) should populate automatically if your profile is up to date.
Enter the date and time when the reported transaction(s) took place. If you are reporting an aggregated 24-hour group of transactions, you will need to provide the 24-hour period start and end times (with time zone). The form has specific fields for indicating the end of the 24-hour period.
Indicate if the report covers a single transaction or multiple transactions in the period. If multiple, you might need to reference how many transactions are included.
Enter Transaction Details: Next, input the details of the transaction(s):
Amount and Virtual Currency Type: For each transaction being reported, input the exact amount of cryptocurrency and select the type (e.g., 2.5 BTC, 50 ETH, 16000 USDT, etc.). The form may also ask for the equivalent amount in CAD, or you may provide the exchange rate used. Ensure you use your documented method to convert to CAD and note the rate/date.
Date and Time: Provide the date/time when each transaction was received by you (usually the blockchain timestamp or the time it hit your system).
Crypto Addresses: Enter the sending address (originating wallet) from which the virtual currency was sent to you. Also provide the receiving address or account on your side (for example, the deposit address or the beneficiary’s crypto wallet on your platform). These addresses are crucial for FINTRAC’s records.
Starting Action: The form will have a section for the “starting action” of the transaction – essentially how the transaction was initiated. Here you describe the source or method. For example, was it an incoming blockchain transfer from an external wallet? Was it received in person (e.g., someone handed you a hardware wallet or QR code in person)? Was it via an ATM? You may choose from predefined categories and then fill specifics. In many cases for MSBs, the starting action is “receipt of virtual currency from [a wallet/address]”. If there are multiple incoming transactions in this report, you’ll list each under a separate starting action entry.
Completing Action: The “completing action” describes how the transaction concluded on your end. This could be “credited to client’s account (wallet) on [Your Platform]” or “Exchanged to CAD and deposited to client’s bank account” or even “crypto loaded onto prepaid card,” depending on what you did with the funds. Essentially, it’s the disposition of the crypto after you received it. In straightforward deposit cases, the completing action might simply be “added to [Client Name]’s wallet in our system.” If the transaction involved more than one outcome (for example, in one of FINTRAC’s examples a client deposited crypto and then immediately used a portion to buy into a fund, creating two outcomes), you may have multiple completing actions.
Identify the Parties Involved: This is a critical part of the LVCTR form – identifying who is who in the transaction:
Person Conducting the Transaction (Conductor): Input the details of the individual who performed the transaction. If your client initiated the transfer from their own wallet, that client is the conductor. In the form, provide their full name, date of birth, address, occupation, etc. Then provide the details of the ID you used to verify them (e.g., “Driver’s License – AB123456 – issued by Ontario, Canada”). If the conductor is an entity (less common for individuals sending crypto, but could be a business), you would provide the entity’s information and the person acting on its behalf.
Beneficiary: This refers to the person or entity who benefited from the transaction – essentially, whose account or wallet the crypto ended up in. In many cases, the conductor and beneficiary might be the same (e.g., John Doe sent crypto from his external wallet to his own account on your platform – he is both conductor and beneficiary). If they are different, you’ll fill out the beneficiary’s information separately. For example, Sam deposits crypto that goes into Alice’s account – Sam is conductor, Alice is beneficiary. Provide the beneficiary’s identifying details similar to above.
Third Party Determination: Indicate whether the transaction was done on behalf of a third party. If yes, you will need to input that third party’s information as well (the actual person/entity who owns or is behind the funds). This could be the case if, say, an employee of a company transferred company crypto into an exchange – the company is the third party for whom the employee acted. Record the third party’s name, address, and if it’s an entity, details like incorporation number, etc.
Multiple persons/entities: The LVCTR form allows multiple persons to be recorded if needed (e.g., two people jointly conducting a transaction, or multiple beneficiaries). Fill out all that apply. FINTRAC’s guidance emphasizes capturing all “other persons or entities involved” in the transaction – this ensures transparency about everyone in the chain.
Review and Validate the Information: Before submission, carefully review each section of the report for completeness and accuracy:
Make sure no required fields are left blank without reason. Fields marked with an asterisk (*) are mandatory – the system might prevent submission if these are empty.
Check that names are spelled correctly, numbers (like crypto amounts and IDs) are accurate, and addresses (both physical and crypto addresses) are correct. Even a small typo in, say, a wallet address or ID number could cause issues or require a correction later.
Ensure the date/time and time zone entries make sense (e.g., you didn’t accidentally put tomorrow’s date or the wrong timezone offset).
If the system has a validation tool or highlights errors, use it. FINTRAC provides validation rules and guidance for filling out each field – these can often be found in help links or their published guidance.
Submit the LVCTR to FINTRAC: Once you are satisfied everything is filled in correctly, proceed to submit the report. The FWRS will transmit the LVCTR securely to FINTRAC. You should receive a confirmation (on-screen and/or via email) that the report was successfully received by FINTRAC. Note any reference number or confirmation ID provided.
Save a Copy and Document the Filing: Immediately after submission, save a copy of the report (the FWRS typically allows you to download a PDF of the submitted report or you might have to print to PDF). Retain this in your records. Jot down the date and time of submission – remember, you are required to keep this report for 5 years. It’s wise to also log this in an internal register of FINTRAC reports for your compliance management. Verify that the report is in your system’s “sent reports” list on FWRS for future reference.

By following the above steps, you can ensure your LVCTR is filed completely and correctly via FINTRAC’s system. The electronic filing is the preferred method – FINTRAC actually discourages using paper forms if you have the ability to report online. Electronic submission is faster and provides instant confirmation. Only if you have no technical capability to submit electronically should you resort to mailing or faxing FINTRAC the paper form, which is far less efficient.

Common mistakes to avoid: Even with the steps laid out, MSBs sometimes make errors in LVCTR filing. Here are some frequent pitfalls and how to avoid them:

Failing to aggregate transactions: Ensure your systems and staff recognize when multiple smaller crypto transactions need to be combined. If you only report a $9,000 deposit and ignore the $2,000 that came hours later from the same client, you’ve missed an LVCTR. Set monitoring to flag when a client’s daily crypto receipts hit the threshold.
Missing or incorrect information: Incomplete reports (missing fields or using placeholder text like “N/A” improperly) can be deemed non-compliant. For example, forgetting to include the crypto wallet address, or not providing the client’s occupation, can be an issue. Double-check mandatory fields and use FINTRAC’s guidance to fill the report properly. Don’t enter invalid data (like a dummy address or “unknown”) unless permitted by guidance and only after you’ve exhausted attempts to get the info.
Not verifying identity at the time of transaction: An MSB might accept a large crypto deposit without completing KYC, perhaps because the client’s account was opened before with a lower tier. This is a mistake – always verify the client’s identity before completing a large transaction. If you file a report saying “John Doe deposited 5 BTC” but you have no verified ID for John Doe, you are in trouble. Have clear procedures: if a client hits, say, $9,000 and wants to go higher, pause and get the necessary ID before proceeding or finalizing the transaction.
Delaying the report: Procrastinating on filing can lead to missing the legal deadline (discussed below). Don’t wait until the fifth day if you can file on the first. FINTRAC expects “as soon as practicable.” Late reporting is a violation. Aim to submit the report within 1–2 business days of the transaction if possible, to avoid any last-minute issues.
Using the wrong report type or method: Make sure you submit an LVCTR specifically, not a different report by mistake. Also, use the official FINTRAC systems. There are third-party compliance software that can connect via FINTRAC’s API – if you use those, ensure they are properly configured for the LVCTR format. If you opt for manual web entry, stick to FWRS and follow the on-screen instructions carefully.
Not keeping evidence: Some filers submit the LVCTR and forget to save a copy or record confirmation. Later, during an audit, they scramble to prove they filed it. Always keep your receipts – a PDF of the report or a FINTRAC acknowledgment. This also helps if any question arises about what exactly was reported.

By being diligent and detail-oriented, you can avoid these common mistakes. Filing an LVCTR will then become a smooth routine rather than a headache for your compliance team.

Deadlines for Reporting: “As Soon as Practicable” (Within 5 Days)

How quickly must you file the LVCTR? Canadian regulations require that a Large Virtual Currency Transaction Report be submitted “as soon as practicable”, and in any case no later than 5 business days after the date on which you received the $10,000+ virtual currency. In other words, once that big crypto transaction hits your account, the clock starts – you have up to five working days to get the report to FINTRAC.

FINTRAC’s guidance explicitly states the 5-day timeline: if you receive the funds on, say, Monday, ideally you should file by that week (by the next Monday assuming no holidays). “As soon as practicable” means you shouldn’t wait unnecessarily – if you can file it the next day, do so. The five-day allowance is the outer limit, not the goal. Reporting promptly demonstrates good compliance and leaves less room for error or forgetting.

Without delay: The phrase “without delay” is often used in FINTRAC materials synonymously with “as soon as practicable.” It underscores that reporting should be a priority. In practical terms, many MSBs integrate automated alerts so that when a large crypto deposit occurs, the compliance officer is notified immediately and can begin preparing the LVCTR. Some even file the same day or within 24 hours, which is an excellent practice. This way, even if there are follow-up questions or data to gather, you have cushion before the 5-day mark hits.

Keep in mind that the 5 business day deadline is a legal requirement post-December 1, 2021 (prior to that, during a transition period, filings were deferred, but now it’s firmly in place). If a report is filed on day 6 or later, it’s technically late and non-compliant. FINTRAC’s systems log the date of submission versus the date of the transaction, so timeliness is recorded.

Weekends and holidays: “Business days” excludes weekends and federal holidays. However, if a transaction occurs on a weekend, best practice is not to wait until the end of the next week to report it. Start the reporting process the next business day. The sooner FINTRAC has the data, the better – timely reporting can be crucial for financial intelligence (e.g., if that crypto was involved in something illicit, reporting it quickly is important).

In summary, always aim to report LVCTRs as quickly as possible, and never later than 5 business days from the transaction. Mark your compliance calendar and internal procedures with this deadline so nothing slips through the cracks.

Consequences of Failing to Report or Incomplete Submissions

Non-compliance with LVCTR obligations can lead to serious regulatory consequences for your business. FINTRAC and the PCMLTFA levy strong penalties to ensure reporting entities follow the rules. Here’s what’s at stake if you fail to report, file late, or submit incorrect/incomplete information:

Administrative Monetary Penalties (AMPs): FINTRAC has the authority to issue fines for compliance violations. Failing to submit an LVCTR on time, or at all, is considered a violation of the regulations. The penalty amount depends on the severity and history of non-compliance, but it can be substantial – ranging from thousands to even hundreds of thousands of dollars per violation. Each unreported transaction could count as a separate violation. FINTRAC publicly names businesses that receive significant penalties, which can damage your reputation in addition to the financial hit.
Criminal Penalties: In egregious cases (especially if it’s proven that the failure to report was willful or with intent to conceal money laundering), criminal charges can be pursued under the PCMLTFA. The law provides for fines up to $2 million and/or up to 5 years imprisonment for certain reporting failures, such as not filing a required report. While this is typically reserved for extreme or repeated violations, it’s not just a theoretical threat – the legislation explicitly makes willful non-reporting a criminal offense. FINTRAC’s own forms warn that failure to provide required information may lead to criminal or administrative penalties.
Compliance Examinations and Remediation: Even if fines or charges aren’t immediately in play, FINTRAC can take other actions. They conduct regular compliance examinations on MSBs. If during an exam it’s discovered that you missed LVCTR filings or your reports were incomplete, FINTRAC will note those as deficiencies. You’ll then be required to take corrective actions, which could include undergoing an independent audit, enhancing your compliance program, and retraining staff. Repeat findings or unaddressed issues can escalate to enforcement action.
Loss of MSB Registration: The ultimate administrative sanction would be FINTRAC deciding to revoke or not renew your MSB registration for serious non-compliance. Without registration, you cannot legally operate as a money services business in Canada. This is rare and usually comes after other enforcement steps, but it’s a possible consequence if an MSB persistently fails to meet obligations like reporting.
Reputational Damage: FINTRAC publishes notices of administrative penalties on its website. Being listed as a non-compliant firm can harm your credibility with banks (who may close your accounts) and with customers who may lose trust. For fintech and crypto businesses, trust and banking partnerships are vital – a public compliance breach can jeopardize those.

Incomplete or inaccurate submissions can be just as problematic as not reporting at all. If you submit an LVCTR missing key fields or with obvious errors (like misidentifying the client or amount), FINTRAC may consider it an invalid report. That means you haven’t actually met your obligation. It could also prompt follow-up from FINTRAC asking for corrections. If you realize after the fact that you made a mistake on a report, you should file a corrected report as soon as possible (the FINTRAC portal allows you to resubmit corrections, with an indication that it’s a correction to a previous report). Always address any deficiencies proactively.

Voluntary self-disclosure: If you discover that you failed to report something or filed it late, FINTRAC strongly encourages filing a Voluntary Self-Declaration of Non-Compliance (VSDONC). This is essentially you coming forward to admit the lapse before FINTRAC finds it in an audit. While this doesn’t erase the violation, it’s considered a mitigating factor that can reduce the likelihood or severity of penalties. It demonstrates good faith. For instance, if an MSB realizes a year later that a particular $11,000 crypto deposit last year was never reported (perhaps due to a system glitch or human oversight), the MSB should promptly submit the LVCTR late and send FINTRAC a voluntary disclosure explaining the situation and the remedial measures taken to prevent a recurrence. Regulators prefer honesty and improvement over concealment.

In short, the cost of non-compliance far exceeds the effort of doing things right. Every MSB should treat LVCTR filings with seriousness. Avoiding a penalty is straightforward if you have the proper internal controls: identify large crypto transactions, verify the client, file the report in time, and keep your records. If you do that, you won’t have to worry about fines or enforcement actions related to this obligation.

Conclusion and Best Practices

The introduction of the Large Virtual Currency Transaction Report requirement marked a significant evolution in Canada’s AML regime, bringing cryptocurrency transactions under similar oversight as large cash deals. For Canadian fintech and crypto MSBs, mastering LVCTR obligations is now a fundamental part of operating legally and responsibly. Here are key takeaways and best practices to ensure your business stays compliant:

Integrate LVCTR checks into your daily operations. Your transaction monitoring systems should automatically flag incoming crypto transactions that approach $10k, and aggregate multiple smaller transfers. This way, you’ll never accidentally miss a reportable event.
Train your staff. Front-line employees and compliance officers alike should be well-versed in recognizing LVCTR scenarios and gathering the needed information (client ID, source of funds, etc.). They should know that a large crypto deposit = trigger KYC if not already done, and notify compliance to start the report.
Leverage technology. Use the FINTRAC Web Reporting System or an integrated compliance software to file reports efficiently. Templates or saved profiles (for repeat customers) can speed up data entry and reduce errors. FINTRAC’s system even allows creating “subject profiles” for individuals/entities to reuse their info on multiple reports, which can be handy if you have frequent large transactions from the same client.
Stay updated. FINTRAC periodically updates its guidance and may tweak forms or thresholds (for example, if laws change). Subscribe to FINTRAC’s mailing list or check their website for updates relevant to MSBs. As of now, $10,000 remains the magic number, but regulators continue to assess risks and could adjust requirements.
Consult experts if needed. If you are unsure about any aspect of LVCTR filing – whether a particular transaction is reportable, or how to fill out a tricky part of the form – don’t hesitate to consult compliance professionals or legal counsel. Given the stakes (penalties, etc.), it’s worth getting it right. FINTRAC’s own guidance documents and FAQ are also excellent resources (and they have a toll-free inquiries line for reporting entities).

By following the rules outlined in Canadian legislation and FINTRAC guidelines, your MSB can confidently navigate the LVCTR process. Reporting large virtual currency transactions is not just a legal obligation – it’s part of your contribution to the fight against money laundering and terrorist financing. It ensures that the anonymity of crypto isn’t misused to hide illicit funds, and it helps protect the integrity of Canada’s financial system.

if your Canadian crypto business receives $10,000+ in crypto from a client, know that an LVCTR is required. File it promptly (within 5 days), include all required details, verify your client’s ID, and keep your records. By doing so, you’ll keep your business in good standing with regulators and avoid the costly consequences of non-compliance. Stay vigilant, stay compliant, and you can continue to operate and grow your fintech or crypto venture with peace of mind in the Canadian market.