Canada’s anti-money laundering supervisor has fined Cryptomus’ parent company over US$126 million for compliance failures.
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The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) yesterday announced a C$177 million (US$126 million) fine against Xeltox Enterprises, which operates Cryptomus and was previously known as Certa Payments, for a series of compliance shortcomings.
The watchdog found the failures under anti-money laundering and counter-financing of terrorism (AML/CFT) legislation at the British Columbia-based money services business after conducting a compliance examination.
These included failing to submit over 1,000 suspicious transaction reports and reports for over 1,500 virtual currency transactions over C$10,000 (US$7,150) in July 2024, non-compliance with a ministerial directive linked to transactions associated with Iran, and inadequate and outdated policies and risk assessments.
The fine is nine times larger than the previous recordholder, Seychelles-incorporated Peken Global, the operator of crypto exchange KuCoin, which was hit with a C$19.5 million (US$14 million) fine last month for similar AML/CFT compliance failures.
Given the extent of Xeltox’s failures, FINTRAC has decided to penalise it to the “fullest extent” and send a message to the industry the regulator is “serious”, Jacqueline Shinfield, partner at Blakes in Toronto, told Lexology PRO.
The regulator’s chief executive Sarah Paquet said: “Given that numerous violations in this case were connected to trafficking in child sexual abuse material, fraud, ransomware payments and sanctions evasion, FINTRAC was compelled to take this unprecedented enforcement action.”
Cryptomus did not respond to a request for comment.
With just over two months left of the year, the value of FINTRAC’s enforcement action in 2025 has risen exponentially compared with previous years. While yesterday’s fine against Xeltox Enterprises constitutes over 86% of this, the number of penalties imposed against entities has also risen to its highest level this decade (see below).
Shinfield said FINTRAC has “absolutely” become more aggressive in recent years, which she linked to the upcoming Financial Action Task Force (FATF) mutual evaluation, set to begin next month.
FINTRAC said financial crime risks have risen in tandem with the growth of virtual currency.
“The vulnerabilities in the virtual currency sector significantly impair transparency and accountability and make the sector as a whole susceptible to exploitation by illicit actors if proper anti-money laundering and anti-terrorist financing compliance controls are not put in place,” it said.
FINTRAC has since 2008 had the legislative authority to issue administrative monetary penalties to businesses failing to comply with Canada’s AML/CFT legislation.
It can impose penalties up to C$1,000 (US$715) for each ‘minor’ violation, C$100,000 (US$71,500) for each ‘serious’ violation and C$100,000 (US$71,500) for each ‘very serious’ violation if against an individual but up to C$500,000 (US$357,400) if against an entity.
Xeltox’s violations were in the thousands and the limits apply to each individual breach, hence its total penalty far exceeds these figures.
In June, Canada’s federal government introduced a bill to parliament that, if passed, would introduce a new administrative monetary penalty framework and raise penalties by 40 times across all violation categories. This would mean a ‘very serious’ violation could carry a maximum penalty of C$20 million (US$14.3 million) per offence.
The number of public enforcement decisions has also risen since 2020 but at a slower and less consistent rate than the value of imposed penalties. FINTRAC imposed penalties on 14 entities in 2022, an outlier in an otherwise year-on-year increasing trend.
As FINTRAC acknowledged, financial crime risks have grown alongside the crypto industry’s development, at least partially explaining the rise in enforcement.
Projected revenue in the Canadian cryptocurrency market is expected to reach US$1.3 billion this year and grow by over 10% next year, according to Statista data.