Nikolas Sargeant
Canada's financial crime watchdog has fined crypto exchange Cryptomus a record C$176.96 million for anti-money-laundering and sanctions-related violations, marking the largest penalty in FINTRAC's history. The British Columbia-incorporated operator, officially Xeltox Enterprises Ltd., failed to report more than 1,000 suspicious transactions in July 2024 involving darknet markets and wallets tied to child sexual abuse material, fraud, ransomware payments, and sanctions evasion.
FINTRAC also found 7,557 unreported transfers from Iran between July and December 2024 and 1,518 large-value crypto transactions exceeding C$10,000 during the same period that went unreported. The regulatory agency determined that Cryptomus lacked proper "know-your-client" procedures and risk assessments, calling its compliance program "incomplete and inadequate.”
FINTRAC director and CEO Sarah Paquet said in a statement that given the violations were connected to trafficking in child sexual abuse material, fraud, ransomware payments and sanctions evasion, the agency was compelled to take this unprecedented enforcement action. The regulator emphasized that crypto firms remain vulnerable to exploitation by illicit actors when compliance controls break down.
The penalty far surpasses the C$19.5 million fine imposed on KuCoin in July and disclosed in September, and follows earlier action against Binance, which was fined C$6 million in 2024. Cryptomus was also temporarily banned by the B.C. Securities Commission in May from trading securities and other market activities, highlighting the exchange's ongoing regulatory troubles.
