The Financial Transactions and Reports Analysis Centre of Canada (Fintrac) has fined the operator of the crypto platform Cryptomus C$177 million for violations pertaining to anti-money laundering (AML) and counter-terrorist financing laws.
Xeltox Enterprises received the fine after Fintrac determined that Cryptomus failed to submit suspicious transaction reports on over 1,000 occasions. Additionally, the platform did not report more than 1,500 transactions involving $10,000 or more in virtual currency.
Many of the unreported suspicious transactions raised “reasonable grounds” for suspicion, linking them to activities such as the laundering of proceeds related to child sexual abuse material, fraud, ransomware payments, and sanctions evasion.
The company was also found deficient in its compliance measures, lacking written policies and procedures, as well as failing to assess and document risks associated with money laundering and terrorist financing.
Fintrac’s CEO, Sarah Paquet, explained the severity of the fine, stating, “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.”