- Xeltox/Cryptomus fined CAD 177 million for failing to report more than 1,000 suspicious cryptocurrency transactions.
- The violations involved child sexual abuse material, fraud, ransomware payments, and sanction-evasion transactions.
- The company previously faced a Securities Commission lawsuit in British Columbia over operating an unrecognized exchange.
The Canadian Financial Transactions and Reports Analysis Centre (Fintrac) issued its largest recorded penalty to Xeltox Enterprises Ltd., operating as Cryptomus, after finding the firm failed to comply with anti-money laundering (AML) regulations.
The Vancouver-based virtual asset service provider was fined CAD 177 million (approximately USD 126 million) for multiple reporting failures related to suspicious transactions, Fintrac said in a statement released Wednesday.
Widespread reporting failures
Fintrac’s investigation found that Cryptomus failed to report thousands of transactions in a single month, raising serious regulatory concerns.
The agency said in July 2024 the company did not file reports for more than 1,000 transactions that reasonably appeared to be linked to money laundering, including proceeds connected to child sexual abuse material, fraud, ransomware payments and sanctions evasion.
Fintrac also found that Cryptomus failed to report over 1,500 transactions in the same period in which clients transferred virtual currency worth CAD 10,000 or more in a single transaction.
These reporting deficiencies prompted Fintrac to take what it described as “unprecedented enforcement action,” reflecting the severity of the potential risks of financial crime.
Fintrac’s CEO Sarah Paquet emphasized that the scope and nature of the breaches required decisive action, citing repeated failures to meet AML obligations.
Previous regulatory scrutiny of Cryptomus
Cryptomus, previously known as Certa Payments Ltd., offers a range of cryptocurrency services including trading, payments, wallets and a peer-to-peer exchange.
The firm had already attracted attention from Canadian regulators.
In May, the British Columbia Securities Commission accused Cryptomus of potentially operating as an unrecognized exchange.
The provincial regulator issued a temporary order suspending the firm’s trading in securities or derivatives until June, underscoring ongoing concerns about compliance with financial regulations.
Cryptomus’s operations in Canada and its history of enforcement actions highlight the challenges regulators face when overseeing cryptocurrency platforms, especially where transactions may intersect with illegal activity.
The latest fine marks a significant escalation in enforcement and signals Canadian authorities’ intent to hold crypto firms accountable for strict AML compliance.
Implications for the cryptocurrency sector
The record penalty against Xeltox and Cryptomus sends a clear message to crypto businesses operating in Canada: compliance with anti-money laundering rules is mandatory, and failures carry substantial financial and operational risks.
The alleged lapses illustrate the dangers posed by platforms that process high volumes of minimally monitored digital transactions.
Fintrac’s decision highlights that cryptocurrency platforms must make regulatory compliance a core operational priority rather than an afterthought to avoid similar sanctions going forward.
The CAD 177 million fine represents Fintrac’s largest enforcement action to date and sets a new benchmark for regulatory consequences in Canada’s growing digital asset industry.