A cryptocurrency exchange has been fined nearly $177 million by Canada’s financial intelligence agency, marking the largest penalty ever imposed. Xeltox Enterprises Ltd., operating as Cryptomus and formerly known as Certa Payments Ltd., received the fine from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
The hefty fine of $176,960,190 surpasses the previous record penalty of around $20 million given to Peken Global Ltd, the operator of KuCoin, another cryptocurrency firm, in September. FINTRAC’s director and CEO, Sarah Paquet, highlighted that the violations included failure to flag over 1,000 transactions associated with criminal activities such as trafficking in child sexual abuse material, fraud, ransomware payments, and sanctions evasion, leading to the unprecedented enforcement action against Cryptomus.
Among the infractions identified by FINTRAC were 1,068 instances where Cryptomus did not report transactions involving known darknet markets and virtual currency wallets associated with criminal activities. These darknet markets are online platforms where illegal goods and services are transacted anonymously. Additionally, Cryptomus failed to report 7,557 transactions originating from Iran between July 1 and Dec. 31, 2024, despite requirements linked to transactions with the Islamic Republic of Iran.
Moreover, FINTRAC discovered 1,518 transactions in July 2024 that met the threshold for reporting large transfers of virtual currency, which Cryptomus failed to report. The agency also noted deficiencies in Cryptomus’ policies and procedures related to ongoing monitoring and “know-your-client” obligations.
Businesses, including cryptocurrency exchanges, are mandated under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to maintain compliance regimes, identify clients, keep records, and report specific financial transactions to FINTRAC. Cryptomus had previously faced penalties, with the B.C. Securities Commission banning the firm in May from trading securities and other market activities.
In the 2024-25 period, FINTRAC issued 23 violation notices to non-compliant businesses, marking the highest number of notices in a single year and totaling over $25 million in penalties. Since gaining legislative authority in 2008, FINTRAC has imposed more than 150 penalties.