Major Fine of $177 Million Imposed on Xeltox Enterprises by Canadian Regulator

Cryptocurrency and Canadian Flag

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) announced on Wednesday that it has imposed a hefty fine of nearly $177 million on Xeltox Enterprises, the parent company of the cryptocurrency service Cryptomus, due to non-compliance.

Xeltox Enterprises Faces $177 Million Penalty

On October 22, FINTRAC issued a press release detailing the substantial fine it levied against Xeltox Enterprises. This penalty was related to the company’s failure to adhere to Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, as well as associated regulations.

In July 2024 alone, Xeltox Enterprises, formerly known as Certa Payments, neglected to file suspicious transaction reports 1,068 times. The fine imposed totals $176,960,190, making it the highest financial penalty issued by a Canadian regulatory body to date.

In addition, that month, Xeltox did not record over 1,518 virtual currency transactions exceeding $10,000.

“We are committed to collaborating with both domestic and international partners to ensure the safety of Canadians and the stability of Canada’s economic landscape,” stated FINTRAC’s Director and Chief Executive Officer, Sarah Paquet. She emphasized that the violations were serious, linking them to issues such as child sexual abuse material, fraud, ransomware payments, and sanctions evasion, thus necessitating this unprecedented action from FINTRAC.

FINTRAC's Call for Enhanced Compliance in Crypto Sector

Following this significant fine, FINTRAC has reiterated the vulnerability of the digital asset industry, warning that the sector remains susceptible to exploitation by illicit actors without effective anti-money laundering and anti-terrorist financing measures.

“As Canada's virtual currency sector continues to grow rapidly, the associated risks of money laundering, terrorist financing, and sanctions evasion also escalate,” the regulator noted.

FINTRAC is underscoring the necessity for robust compliance frameworks to ensure the protection of Canadians and the integrity of the nation’s financial system.

Key Takeaways

Xeltox Enterprises, parent company of Cryptomus, has been fined nearly $177 million by FINTRAC.
The fine is the largest ever issued by a Canadian regulator for non-compliance with anti-money laundering regulations.
The company failed to report numerous suspicious transactions and high-value virtual currency transactions.
Regulatory bodies emphasize the importance of robust compliance to protect against illicit exploitation in the growing crypto sector.

This incident highlights the need for all cryptocurrency businesses to prioritize compliance with regulatory requirements to maintain a secure financial ecosystem.