Senator Klyne: Mr. Boegman, thank you for being here. You have been good with your answers so far.
As you probably know, Canada was the first country in the world to pass laws regarding crypto-currency. Yet, recent reports suggest unregistered crypto-to-cash services are operating nationwide, often without ID checks or proper records. These systems can be exploited for money laundering and potentially for terrorist financing or foreign interference in our political processes.
How will your office ensure that the long-awaited foreign influence transparency registry captures financial activities conducted through crypto-currency, particularly when these transactions are opaque, rapid and cross borders?
Mr. Boegman: Thank you for the question. If I understand it correctly, my sense is that the types of things you are describing would cross over the mandates of a number of security and law enforcement agencies. The role of the Transparency Commissioner would be to make sure that those entities or individuals who are doing the influence activities, if they are doing so at the behest of and in association with or under the direction of a foreign principal and they meet the other criteria, then they would register. If crypto-currency was part of that, either in terms of disbursing funds in some way, then that would also meet the requirements for that.
As I think I have stated before, those are the sorts of things that I would rely on partners for in terms of specific intelligence or other factors suggesting that these activities fall under the mandate of the Transparency Commissioner. But if they meet those requirements, then registration would be required or they would fall under the range of penalties that are necessary.
Senator Klyne: They have always been there. What I’m focusing on is that we have been waiting a long time for this transparency registry, and I hope you can leverage that up and get the full benefit of the intent.
As a supplementary question, given the rapid growth of crypto‑based finance and the limited enforcement history in Canada, do you see a role for your office in coordinating with the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, the RCMP and other agencies to detect and investigate terrorist financing and crypto-related foreign influence activities before they affect our elections or democratic institutions?
Mr. Boegman: Again, from my understanding, those types of activities would also come under the jurisdiction of other agencies. Certainly, any election financing related types of things would fall under the Commissioner of Canada Elections to investigate if they are foul, if they run counter to the current Canadian financing laws.
If they are used to sponsor terrorist activities or things such as that, then there would be other agencies and other laws that those would apply to. If they are being used in some influence scheme at the direction of a foreign principal, they would be things that would be required to be registered.
I see the registry as an important tool, but it is one tool that is part of a range of measures that are necessary to truly address these threats and risks.