Canada Imposes Record C$176.9M Fine on Crypto Dealer Xeltox for AML Violations
Canada’s anti-money laundering regulator, FINTRAC, has issued a C$176.9 million ($126.14 million) penalty against money services business Xeltox Enterprises Limited, marking the largest fine ever imposed by the agency.
FINTRAC cited Xeltox, also operating as Cryptomus and formerly known as Certa Payments Limited, for failing to submit suspicious transaction reports despite having reasonable grounds to suspect transactions linked to money laundering, child sexual abuse material trafficking, fraud, ransomware payments, and sanctions evasion.
“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,” the agency stated.
Xeltox also failed to report receiving more than C$10,000 in virtual currency from a client, highlighting gaps in compliance with Canadian AML regulations.
Canada’s Push Against Financial Crime
This penalty underscores Canada’s growing effort to clamp down on financial crime. Earlier this week, the government announced the creation of a new agency to combat fraud, money laundering, and recover criminal proceeds. Additionally, the country will face a Financial Action Task Force (FATF) audit next month, placing further scrutiny on its financial crime prevention measures.
The Xeltox fine surpasses FINTRAC’s previous record penalty, which was C$19.6 million ($14.09 million) against Peken Global Limited, operator of the cryptocurrency exchange KuCoin. KuCoin had appealed the fine, calling it “excessive and punitive.”
Implications for the Crypto and Money Services Industry
The Xeltox enforcement signals that Canadian regulators are intensifying oversight on money services businesses and cryptocurrency platforms. Firms operating in Canada must ensure full compliance with AML and reporting obligations or risk historic penalties.
Companies dealing in virtual currencies and financial transactions are now under increased pressure to implement robust anti-money laundering controls, suspicious activity monitoring, and reporting frameworks.
