Canada fines Cryptomus US$126 million

JH Kim

Summary

Canadian financial authorities reported that they fined Xeltox, operator of Cryptomus, US$126 million.
They said the sanction was a measure for violations of anti–money laundering (AML) regulations and is seen as reflecting a trend toward tighter regulation of virtual asset companies in Canada.
Experts analyzed that the fine could affect the global virtual asset regulatory environment and that strengthening internal controls of exchanges and payment platforms is inevitable.

Canadian financial authorities have imposed a US$126 million fine on Xeltox, the operator of the virtual asset (cryptocurrency) service platform Cryptomus. The action is a sanction for violations of anti–money laundering (AML) regulations and is interpreted as reflecting a trend toward tighter regulation of virtual asset companies in Canada.

On the 22nd (local time), Bloomberg reported that Xeltox, headquartered in Vancouver, provides virtual asset trading, payments, wallets, and P2P trading services. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) said Xeltox failed to fulfill its anti–money laundering obligations.

FINTRAC pointed out that Cryptomus did not report suspicious transactions related to child sexual abuse material trading, fraud, ransomware, and other matters to authorities. The sanction shows that supervision of digital asset service providers in Canada is becoming more stringent.

Experts said, "The Canadian government's imposition of a large fine for AML violations could affect the global virtual asset regulatory environment," and analyzed that "strengthening internal controls of exchanges and payment platforms is inevitable."