Canada’s commitment to stringent financial regulations has reached a new height with the imposition of an unprecedented $126 million fine on the crypto platform Cryptomus. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) announced this remarkable penalty due to the company’s significant failures to comply with anti-money laundering (AML) requirements, particularly regarding the reporting of suspicious transactions.
According to FINTRAC, Cryptomus, operated by Vancouver-based Xeltox Enterprises Ltd., neglected to report a staggering 1,518 large virtual currency transactions within a single month. Each of these transactions exceeded the Canadian threshold of C$10,000, which necessitates immediate reporting. This oversight not only highlights a lack of proper monitoring systems but also raises serious concerns about the platform’s commitment to regulatory compliance.
FINTRAC’s investigation revealed that many of the unreported transactions were linked to severe criminal activities, including fraud, ransomware attacks, and the distribution of child exploitation material. “The nature and extent of the violations compelled us to take this action,” stated FINTRAC CEO Sarah Paquet, emphasizing the importance of compliance in the virtual currency sector.
In addition to these alarming findings, FINTRAC uncovered that Cryptomus had processed over 7,500 transactions originating from Iran between July and December 2024, failing to report any of them. This blatant disregard for a specific Ministerial Directive concerning Iran raises significant sanctions evasion concerns, as Canada views such violations as critical to national security. By neglecting to report these transactions, Cryptomus allegedly created avenues for restricted financial activities.
This latest fine is not Cryptomus’s first run-in with Canadian regulators. In May 2024, the B.C. Securities Commission had already banned the platform from trading securities due to previous regulatory breaches. FINTRAC’s latest enforcement action underscores the message that ongoing non-compliance will not be tolerated.
Historically, Canada’s largest fine in the crypto space was set at C$20 million, directed at the operator of KuCoin in 2023. The new penalty against Cryptomus dwarfs this figure, marking a significant escalation in the enforcement landscape of Canada’s cryptocurrency market.
Canada is clearly sending a strong message to all digital asset firms regarding the necessity of compliance with financial laws. With this record fine, FINTRAC is reinforcing its authority and the critical importance of preventing financial crime in the burgeoning digital asset sector. As regulatory scrutiny intensifies, crypto platforms operating in Canada must proactively ensure adherence to stringent regulations to avoid facing severe penalties.
This landmark decision not only exemplifies Canada’s evolving regulatory framework but also serves as a warning to other platforms: compliance is paramount, and the consequences of ignoring it could be monumental.
