Crypto firm Xeltox fined record C$177M by Canadian AML regulator

• Xeltox/Cryptomus fined C$177M for failing to report 1,000+ suspicious crypto transactions.
• Violations involved child abuse, fraud, ransomware, and sanctions-related transactions.
• Firm previously faced BC Securities Commission action over unrecognized exchange operations.

Canada’s Financial Transactions and Reports Analysis Centre (Fintrac) has imposed the largest penalty on record against Xeltox Enterprises Ltd., operating as Cryptomus, after the firm allegedly failed to comply with anti-money-laundering (AML) regulations.

The Vancouver-based cryptocurrency services provider was fined C$177 million ($126 million) for multiple violations involving suspicious transactions, according to a statement released Wednesday.

Widespread reporting failures

Fintrac’s investigation determined that Cryptomus failed to report thousands of transactions in a single month, raising serious compliance concerns.

The agency noted that the company neglected to submit reports on more than 1,000 transactions in July 2024 that raised reasonable suspicion of connections to money laundering, including proceeds linked to child sexual abuse material, fraud, ransomware payments, and sanctions evasion.

Additionally, the regulator found that Cryptomus failed to report over 1,500 transactions in which clients transferred virtual currency of C$10,000 or more in a single transaction during the same period.

These reporting lapses triggered Fintrac to take what it described as “unprecedented enforcement action,” reflecting the severity of the potential financial crime risks involved.

Fintrac CEO Sarah Paquet emphasized that the scale and nature of the violations compelled the agency to act decisively, citing the firm’s repeated failures to meet AML obligations.

Prior regulatory scrutiny on Cryptomus

Cryptomus, formerly known as Certa Payments Ltd., provides a range of cryptocurrency services including trading, payments, wallets, and a peer-to-peer exchange.

The firm has previously drawn regulatory attention in Canada.

In May, the BC Securities Commission accused Cryptomus of potentially operating as an unrecognized exchange.

The provincial regulator issued a temporary order suspending the firm from trading securities or derivatives until June, underscoring ongoing concerns about its compliance with financial regulations.

Cryptomus’s operations in Canada and its previous enforcement history highlight the challenges regulators face in overseeing cryptocurrency platforms, particularly when transactions may intersect with illicit activity.

The latest fine represents a major escalation in enforcement, signaling the Canadian authorities’ intent to hold crypto firms accountable for strict adherence to AML rules.

Implications for the cryptocurrency sector

The record-setting penalty against Xeltox and Cryptomus sends a clear signal to cryptocurrency businesses operating in Canada: compliance with anti-money-laundering regulations is mandatory, and failures carry substantial financial and operational risks.

The firm’s alleged lapses illustrate the risks posed by platforms that handle high volumes of unmonitored digital transactions.

Fintrac’s decision underscores that cryptocurrency platforms must treat regulatory compliance as a central operational priority, not an afterthought, to avoid similar penalties in the future.

The C$177 million fine represents the largest enforcement action in Fintrac’s history and sets a new benchmark for regulatory consequences in Canada’s growing digital asset industry.