- Xeltox/Cryptomus was fined CAD 177 million for failing to report more than 1,000 suspicious cryptocurrency transactions.
- Violations involved child sexual abuse material, fraud, ransomware payments and sanction-related transactions.
- The firm previously faced a complaint from the British Columbia Securities Commission over operating an unregistered exchange.
Canada’s Financial Transactions and Reports Analysis Centre (Fintrac) imposed the largest penalty on record against Xeltox Enterprises Ltd., which operates as Cryptomus, after finding that the company allegedly violated anti-money laundering (AML) rules.
The Vancouver-based virtual asset service provider was fined CAD 177 million (approximately USD 126 million) for multiple compliance 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 concerns about regulatory compliance.
The agency said that in July 2024 the company neglected to file reports on more than 1,000 transactions that gave rise to reasonable grounds to suspect links to money laundering, including proceeds tied to child sexual abuse material, fraud, ransomware payments and sanction evasion.
In addition, Fintrac determined that Cryptomus did not report over 1,500 transactions in which clients transferred virtual currency worth CAD 10,000 or more in a single transaction during the same period.
These reporting deficiencies prompted Fintrac to take what it described as “unprecedented enforcement measures,” reflecting the seriousness of the potential financial crime risks.
Fintrac’s chief executive, Sarah Paquet, stressed that the scope and nature of the violations required decisive action, noting the company’s repeated failures to meet its AML obligations.
Prior regulatory scrutiny of Cryptomus
Cryptomus, formerly 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 regulatory attention in Canada.
In May, the British Columbia Securities Commission alleged that Cryptomus may have been operating as an unregistered exchange.
The provincial regulator issued a temporary cease-trade order halting trading in securities or derivatives until June, underscoring ongoing concerns about compliance with financial rules.
Cryptomus’s operations in Canada and its prior enforcement history highlight the challenges regulators face when overseeing crypto platforms, especially where transactions may intersect with illicit activity.
The latest fine marks a significant escalation in enforcement, signaling Canadian authorities’ intent to hold crypto firms accountable for strict AML compliance.
Implications for the crypto sector
The record fine against Xeltox and Cryptomus sends a clear warning to cryptocurrency businesses operating in Canada: AML compliance is mandatory, and failures carry substantial financial and operational consequences.
The alleged shortcomings illustrate the risks posed by platforms that handle large volumes of inadequately monitored digital transactions.
Fintrac’s decision underscores that crypto firms must treat regulatory compliance as a core operational priority rather than an afterthought if they wish to avoid similar penalties in the future.
The CAD 177 million penalty is the largest enforcement action in Fintrac’s history and sets a new precedent for regulatory consequences in Canada’s growing digital asset industry.