Canada Fines Cryptomus $126M for Major AML Breaches

Canada's financial intelligence agency, FINTRAC, has imposed a record C$176.96 million (approximately $126 million USD) fine on cryptocurrency platform Cryptomus for multiple severe anti-money laundering (AML) and sanctions compliance failures. The Vancouver-based firm, operating as Xeltox Enterprises Ltd., failed to report over 9,000 suspicious and large cryptocurrency transactions in 2024, including many linked to child sexual abuse material, ransomware, fraud, and sanctions evasion involving Iran. Specifically, Cryptomus did not file suspicious transaction reports for over 1,000 cases and failed to report more than 1,500 large-value crypto transfers in July 2024 alone. The exchange also neglected enhanced scrutiny and reporting obligations for 7,557 Iran-linked transactions between July and December 2024, violating Canadian ministerial directives. FINTRAC criticized the company’s compliance framework as incomplete and inadequate, highlighting systemic issues such as poor risk assessment and weak "know-your-client" procedures. This enforcement action is FINTRAC’s largest to date and reflects growing regulatory scrutiny of vulnerabilities in Canada's virtual currency sector.