- Xeltox/Cryptomus fined C$177M for failing to report over 1,000 suspicious crypto transactions.
- Violations involved proceeds linked to child sexual abuse, fraud, ransomware payments and sanction evasion.
- The firm previously faced action from the BC Securities Commission over allegedly operating an unregistered exchange.
Canada’s Financial Transactions and Reports Analysis Centre of Canada (Fintrac) has imposed its largest-ever penalty on Xeltox Enterprises Ltd., which operates as Cryptomus, citing widespread failures to comply with anti‑money laundering (AML) obligations.
In a statement released Wednesday, Fintrac said the Vancouver-based virtual asset service provider (VASP) was fined C$177 million (about US$126 million) for multiple breaches, including numerous failures to report suspicious transactions.
Extensive reporting failures
Fintrac’s investigation found that Cryptomus failed to file thousands of required reports over the course of a month, creating significant compliance concerns. The agency concluded that the company neglected to report more than 1,000 transactions in July 2024 that reasonably raised suspicions of money laundering linked to child sexual abuse material, fraud, ransomware payments and attempts to evade sanctions.
Regulators also discovered that Cryptomus did not report over 1,500 transactions in the same period in which clients transferred more than C$10,000 in virtual currency in a single transaction—another mandatory reporting threshold.
Fintrac described its response as an “unprecedented enforcement action,” reflecting the seriousness of the potential financial crime risks tied to these reporting omissions.
Fintrac CEO Sarah Paquet said the scale and nature of the breaches left the agency no choice but to take decisive action, noting that the company repeatedly failed 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 peer‑to‑peer exchange functions.
The firm has been under regulatory scrutiny in Canada for months. In May, the British Columbia Securities Commission accused Cryptomus of operating as an unregistered exchange. The provincial regulator issued an interim order in June stopping the company from trading securities or derivatives, highlighting ongoing concerns about its compliance with financial rules.
Cryptomus’s operations in Canada and its regulatory history illustrate the challenges authorities face when supervising crypto platforms—particularly where transactions may intersect with criminal activity.
This record penalty marks a significant escalation in enforcement and signals Canadian regulators’ intent to hold digital asset firms to strict AML standards.
Impact on the cryptocurrency sector
The landmark sanctions against Xeltox/Cryptomus send a clear message to crypto firms operating in Canada: adherence to anti‑money laundering rules is mandatory, and failures carry substantial financial and operational consequences.
The alleged lapses at Cryptomus underscore the risks posed by platforms that process large volumes of digital transactions without adequate monitoring and reporting controls.
Fintrac’s action emphasizes that compliance must be embedded in operations from the start rather than added on after the fact if platforms wish to avoid similar penalties in the future.
The C$177 million fine is the largest enforcement measure in Fintrac’s history and establishes a new regulatory benchmark for Canada’s growing digital asset industry.