TLDR
- Canada has imposed a $126 million fine on the crypto platform Cryptomus for serious compliance failures.
- FINTRAC issued the fine after the firm failed to report 1,518 large virtual currency transactions within one month.
- FINTRAC linked the unreported transactions to fraud, child exploitation material, ransomware, and sanctions evasion.
- Cryptomus also failed to report over 7,500 transactions involving Iran, violating a specific Ministerial Directive.
- The Financial Transactions and Reports Analysis Centre of Canada called the non-compliance severe and unprecedented.
Canada’s financial watchdog has issued a record-breaking fine of $126 million against Cryptomus for serious compliance failures. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) found the firm failed to report over 1,000 suspicious transactions. This unprecedented action underscores Canada’s strict approach to crypto-related anti-money laundering enforcement.
FINTRAC Cites “Severe Non-Compliance” in Cryptomus Operations
Canada’s FINTRAC imposed a C$176.96 million fine on Vancouver-based Xeltox Enterprises Ltd., which operates the Cryptomus platform. The agency stated the company failed to report 1,518 large transactions in a single month. These transactions each met or exceeded Canada’s C$10,000 reporting threshold.
The platform processed these without notifying FINTRAC, breaching the core of Canada’s anti-money laundering framework. The volume suggested that Cryptomus lacked a working monitoring system entirely. FINTRAC described the level of non-compliance as both “severe” and unacceptable under Canada’s regulatory standards.
Cryptomus’s failures linked to transactions involving fraud, ransomware, and child sexual exploitation material, according to FINTRAC. “Given the nature and extent of the violations, this action was necessary,” said FINTRAC CEO Sarah Paquet. Canada requires virtual currency dealers to report all large and suspicious transactions under existing legislation.
Over 7,500 Unreported Transactions from Iran Raise Sanctions Concerns
Canada’s financial regulator also identified violations of a specific Ministerial Directive concerning Iran. Between July and December 2024, Cryptomus processed 7,557 transactions originating from Iran. The firm failed to report a single one of those transactions to FINTRAC.
This non-compliance created a possible route for sanctions evasion, which Canada considers a critical national security issue. By ignoring the directive, Cryptomus allegedly enabled a direct link for restricted financial activity. These failures added to the regulator’s decision to impose the historic fine.
This wasn’t Cryptomus’s first regulatory issue in Canada. The B.C. Securities Commission banned the firm from trading securities in May 2024. Canada’s financial watchdog emphasized that continued regulatory breaches would not go unpunished.
Canada Sets a New Benchmark for Crypto Penalties
Until now, Canada’s largest fine in the crypto sector stood at C$20 million. That fine-targeted KuCoin operator, Peken Global Ltd., was fined in 2023. The new Cryptomus penalty surpasses that record by nearly nine times.
Canada is now sending a firm message to digital asset firms regarding compliance expectations. FINTRAC’s enforcement shows that ignoring Canada’s financial laws has serious consequences. Crypto platforms operating in Canada must adhere to strict regulations or face significant penalties.
This decision marks a significant shift in Canada’s cryptocurrency regulatory landscape. It confirms FINTRAC’s growing authority and Canada’s broader effort to prevent financial crime. Regulatory scrutiny in Canada’s digital asset sector is intensifying, and enforcement is likely to follow suit.
