Xeltox Enterprises Faces $177 Million Fine from Canadian Regulator

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has levied a substantial fine of nearly $177 million against Xeltox Enterprises, the parent company of the cryptocurrency platform Cryptomus. This action represents the largest financial penalty imposed by the Canadian regulator to date, underscoring the severity of the compliance violations.

Parent Company of Cryptomus Fined $177 Million

According to an October 22 press release, FINTRAC identified significant non-compliance by Xeltox Enterprises, including the failure to adhere to Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act along with associated regulations. The company, previously known as Certa Payments, reportedly neglected to submit suspicious transaction reports on 1,068 occasions in July 2024 alone.

In the same month, the organization failed to report virtual currency transactions exceeding $10,000 on 1,518 separate occasions. These lapses in compliance have drawn the ire of FINTRAC, which emphasized the connection of these violations to severe criminal activities, including trafficking in child sexual abuse material, fraud, ransomware payments, and sanctions evasion.

Sarah Paquet, FINTRAC's Director and Chief Executive Officer, stressed the importance of safeguarding Canadians and the security of the national economy. She noted that the unprecedented enforcement action was necessary due to the grave nature of the violations.

FINTRAC Pushes for Crypto Compliance After Largest Ever Fine

In light of this massive fine, FINTRAC has highlighted the vulnerabilities within the digital asset industry, warning that the sector remains susceptible to exploitation by illicit actors without proper anti-money laundering and anti-terrorist financing compliance controls. As Canada’s virtual currency sector continues its rapid expansion, the associated risks of money laundering, terrorist financing, and sanctions evasion grow in tandem.

The Canadian watchdog is calling for robust compliance frameworks to protect Canadians and maintain the integrity of the country’s financial system. This call to action is part of a broader effort to ensure that the burgeoning digital asset industry does not become a haven for illegal activities.

The case of Xeltox Enterprises serves as a stark reminder of the critical need for stringent compliance measures in the cryptocurrency sector. As regulators like FINTRAC continue to monitor and enforce compliance, companies in the digital asset space are urged to strengthen their internal controls to prevent similar enforcement actions.

For more detailed information, refer to the official announcement on the Cryptonews website.