Cblocks Finds A New Home in Canada
The list of cryptocurrencies and blockchain companies moving to Canada and Europe is growing longer by the day. The latest addition to this group is Cblocks, a Miami-based firm that deal in digital currencies. The company sources have cited that they are moving to Canada because of lack of regulatory clarity in the United States. What was American loss became Canadian gain. The firm has already generated $32,000 in a month by selling cryptocurrency mystery boxes to its customers. These boxes come with assorted currencies.
The company has clearly mentioned that their move is motivated by the regulatory stance of the authorities in the US. They claimed to have talked to top lawyers from two different legal firms who were unable to come to a single conclusion about the precise classification of their business.
Auston Bunsen, the co-founder and chief executive officer of the firm said, “They can’t agree as to whether we’re a money services business or not. Canada has much friendlier regulation when it comes to cryptocurrencies. They only require a federal registration.”
The legal and legislative constrains that plague American companies are ether absent or softer in Canada, which is making the move more suitable. This is not all. The environment, weather, utility rates and the lack of language barriers has also made Canada a very lucrative option. The firm sells an encrypted USB that works like a mystery box, popular with many online retailers. The USB contains an assortment of five random cryptocurrencies that are chosen by the company on behalf of the customers. For this, they charged a service fee of $50.
The legal framework is such that despite providing a tangible thing as a product, the company will be considered a money services business, per the US law. This is because the cryptocurrencies sold in that box will be considered as securities. It is clear that the law is not ready for new types of businesses that are hybrids of old business models.
It is not just regulation that is making the company shift. Canada is also highly cost effective as compared to the US. Here, they will have to follow very stringent anti-money laundering laws that will increase the cost of business. This is not where the costs end. They will also have to pay a significant amount in registration fees as they will be termed as a money service business. In Canada, the same classification will not attract a higher fee, which is great for the company.
Cblocks is expecting to be incorporated officially as a Canadian firm in the upcoming few weeks. It will need to bring at least one Canadian citizen in the board or it will not qualify for Financial Transactions and Reports Analysis Centre of Canada licensing. It will be launching its service for Canadian customers in May. The founder, Bunsen, will stay back in Miami but the company’s exclusive focus will be on Canadian citizens for now.
The US authorities will have to clarify their crypto regulations in the country soon or several profitable businesses that could have brought valuable tax dollars home will go elsewhere.