- FINTRAC issued a record C$177M fine to Cryptomus for major AML and sanctions violations.
- The exchange failed to report over 9,000 suspicious and large crypto transactions in 2024.
- Canada tightens crypto oversight as regulators push for stricter compliance standards.
Canada’s financial intelligence unit, FINTRAC, has imposed its largest penalty ever, levying a C$176.96 million (approx. $126.2 million USD) fine against crypto exchange Cryptomus for egregious violations of anti-money laundering (AML) and terrorist financing laws. The operator, registered as Xeltox Enterprises Ltd. and based in British Columbia, faces the historic fine after investigations revealed systemic failures in compliance and reporting.
According to FINTRAC, the exchange failed to report more than 1,000 suspicious transactions in July 2024. These involved funds linked to darknet markets, ransomware operations, fraud, child sexual abuse material, and sanctions evasion.
The agency further revealed that between July and December 2024, Cryptomus did not report 7,557 transactions originating from Iran. Under Canadian ministerial directives, such transfers must be treated as high-risk, requiring identity verification, due diligence, and record maintenance. FINTRAC confirmed that none of these obligations were fulfilled.
What Specific AML Failures Triggered the Record FINTRAC Fine?
Investigators also identified 1,518 unreported large-value transactions exceeding C$10,000 during the same period. FINTRAC stated that Cryptomus lacked a proper compliance framework and adequate “know-your-client” procedures, calling its internal policies incomplete and insufficient.
The violations occurred under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which mandates that financial entities maintain client records, verify identities, and report certain transactions to FINTRAC.
Prior Sanctions and Broader Regulatory Crackdown
Earlier in May, the British Columbia Securities Commission banned Cryptomus from trading securities and participating in other market activities. The recent fine adds to the growing list of regulatory actions against crypto exchanges in Canada.
In 2024–2025, FINTRAC issued 23 violation notices to various firms, totaling more than C$25 million in penalties. The Cryptomus case surpasses previous fines, including the C$19.5 million penalty imposed on KuCoin and a C$6 million fine on Binance for similar compliance breaches.
FINTRAC Director Sarah Paquet stated that the case points to ongoing vulnerabilities within the crypto sector when firms fail to establish strong compliance systems.
Related: Canada Leads $25M Crypto Scam Takedown with Chainalysis Help
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