Canada’s financial intelligence agency has imposed an unprecedented penalty. FINTRAC fined the cryptocurrency platform Cryptomus $176.9 million Canadian dollars (C$), equivalent to $126 million USD. This action responds to thousands of serious anti-money laundering (AML) breaches. The FINTRAC fine on Cryptomus was announced this Wednesday, highlighting massive failures in reporting suspicious transactions.
The penalty is the largest ever imposed by FINTRAC. The regulator released the details in an official statement. The sanction far exceeds previous actions against other major exchanges.
FINTRAC’s investigation identified 2,593 distinct breaches. Cryptomus failed to report 1,068 suspicious transactions. Furthermore, the firm omitted 1,518 reports of large-value cryptocurrency transfers. These serious failures occurred during the month of July 2024 alone. According to the agency, these compliance lapses concealed illicit activity. Links to child sexual exploitation material, ransomware, and fraud were detected.
FINTRAC noted the company’s compliance policies were “incomplete and inadequate.” Vulnerabilities in the virtual currency sector impair transparency and accountability. They make the digital economy susceptible to exploitation by illicit actors.
How Did the Company Operate and What Links Were Discovered?
The investigation revealed further irregularities. Cryptomus, federally registered as Xeltox Enterprises Ltd., listed an address in Vancouver. However, this address turned out to be a rented mailbox. FINTRAC found no evidence of Canadian staff or physical presence. In fact, communications during the compliance examination originated from Uzbekistan and Spain. The agency concluded the company “had no employees working in Canada.”
Additionally, violations of a Ministerial Directive were cited. This required enhanced scrutiny of transactions linked to Iran. 7,557 Iran-linked transfers were identified between July and December 2024. These operations went unverified and unreported.
This record penalty sets a new regulatory standard. The FINTRAC fine on Cryptomus is nearly nine times larger than the one imposed on KuCoin’s operator ($14M) last month. It also dwarfs the C$6 million fine assigned to Binance in May. FINTRAC’s message is clear. Crypto platforms must rigorously comply with Canadian regulations or face severe financial consequences.
