Canada’s financial watchdog has levied its largest-ever penalty against a crypto firm. Vancouver’s Cryptomus faces a $126 million fine for failing to report more than 1,000 suspicious transactions linked to darknet markets and terrorist financing in a single month.

In a statement the Financial Transactions and Reports Analysis Centre of Canada announced it had levied an administrative monetary penalty of C$176.96 million (about $126 million) against Xeltox Enterprises Ltd., the Vancouver-based entity operating the crypto platform Cryptomus.

The penalty, issued on Oct. 16, stems from what the agency described as non-compliance so severe that it allowed the platform to process more than a thousand suspicious transactions in a single month without a single report to authorities.

FINTRAC linked these failures to the laundering of proceeds from trafficking in child sexual abuse material, fraud, ransomware, 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,” FINTRAC CEO Sarah Paquet said.

A pattern of non-compliance and cross-border blind spots

FINTRAC’s examination revealed that Cryptomus operated for an entire month without reporting 1,518 separate virtual currency transactions that met or exceeded the C$10,000 threshold.

This fundamental reporting requirement is a cornerstone of Canada’s anti-money laundering framework, designed to create a financial trail for large movements of value. The sheer volume of these missed reports suggests a monitoring system that was either b

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Author: Brian Danga