The anti-money laundering watchdog has imposed a hefty fine for failing to file more than 1,000 suspicious transaction reports.
Canada's anti-money laundering watchdog has hit Vancouver-based cryptocurrency exchange Xeltox Enterprises (operating as Cryptomus) with its largest fine to date.
Xeltox representatives from Uzbekistan and Spain said the company has no employees working in Canada.
The nearly $177 million fine comes as the Financial Transactions and Reports Analysis Center of Canada (FINTRAC) found nearly 2,600 violations Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The law requires financial institutions to maintain certain compliance standards and to record and report certain types of transactions to FINTRAC. The fine significantly exceeds FINTRAC's previous record fee of almost 20 million dollars against another cryptocurrency exchange KuCoin last month.
The agency said Cryptomus allegedly committed six types of violations, including failing to file suspicious transaction reports associated with known sites of criminal activity, such as trafficking in child sexual abuse material, more than 1,000 times.
“Given that multiple violations in this case involved trafficking in child sexual abuse material, fraud, ransomware payments and sanctions evasion, FINTRAC was forced to take this unprecedented enforcement action,” said FINTRAC CEO and Director Sarah Paquet.
Cryptomus also failed to report large single cryptocurrency transactions of $10,000 and more on more than 1,500 occasions in July 2024 alone, and 7,557 transactions originating from Iran. The latter contradicts ministerial directive maintain records and report all transactions out of the country to FINTRAC.
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FINTRAC reports that Cryptomus is registered in British Columbia with an address in Vancouver, but during a review of the company in March 2025, Xeltox representatives from Uzbekistan and Spain told the agency that it had no employees working in Canada. Sabina Salim Kyzy Berdieva, its sole director, is from Uzbekistan, and the Cryptomus trademark was registered in Canada by a native of Kazakhstan, according to FINTRAC.
In a statement, FINTRAC said the risks of money laundering, terrorist financing and sanctions evasion are growing along with Canada's virtual currency sector. The agency added that the sector's vulnerabilities “significantly impair” transparency and accountability, leaving it “vulnerable to exploitation by illicit actors” unless appropriate measures are taken.
FINTRAC fined the world's largest cryptocurrency exchange, Binance. $6 million last year for committing two violations of the same anti-money laundering law. The agency said Binance failed to register as a foreign money services company and report large virtual currency transactions, the exchange's decision. later filed an appeal.
The upcoming federal budget, scheduled for November 4, is expected to create a new financial crimes agency to combat money laundering and fraud.
Image provided Unsplash. Photo by the author Kanchanara.
