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- FINTRAC fines Cryptomus record C$176.96M for major compliance breaches.
- Over 1,000 suspicious crypto transactions linked to illicit activities found.
- Canada intensifies crypto oversight after record penalty against Cryptomus.
Canada’s financial intelligence agency has issued its largest-ever penalty against a crypto exchange. The Financial Transactions and Reports Analysis Center of Canada (FINTRAC) fined Cryptomus, officially known as Xeltox Enterprises Ltd., a record $ 176.96 million for widespread breaches of anti-money laundering and sanctions regulations.
As FINTRAC notes, the operator based in British Columbia did not report more than 1,000 suspicious transactions in July 2024. These deals were linked to child sexual abuse material, fraud schemes, ransomware payments, and sanctions evasion in darknet markets and wallets.
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Major Violations Uncovered by FINTRAC
The watchdog also found 7,557 unreported transfers of funds from Iran between July and December 2024, as well as 1,518 unreported large-value crypto transactions exceeding C$10,000 in the same period. According to FINTRAC, the company failed to follow due diligence procedures, specifically the “know-your-client” requirements, and did not conduct a risk analysis. The compliance program is described as incomplete and weak.
Cryptomus has previously been subject to regulatory action this year, with the British Columbia Securities Commission prohibiting the platform from trading securities in the province.
Record Penalty and Ongoing Regulatory Crackdown
Financial regulator FINTRAC’s Chief, Sarah Paquet, indicated that enforcement shows crypto platforms are still prone to exploitation by illicit individuals in instances where compliance systems are not properly upheld. She pointed out that companies operating in this field should have robust internal controls to prevent the abuse of services provided by the companies.
The penalty levied on Cryptomus is greater than any other fines brought against the agency. It is significantly greater than the C$19.5 million penalty imposed on KuCoin in July and reported in September, and far exceeds the C$6 million penalty imposed on Binance in 2024.
FINTRAC confirmed that the move was part of a broader regulatory initiative to subject crypto exchanges to the same compliance policies as traditional financial institutions operating in Canada.
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