Canada Hits Crypto Firm with Record $127 Million Fine for AML Failures

Canada’s FINTRAC has issued its largest-ever penalty — $127 million — against Xeltox Enterprises, the company behind the Cryptomus cryptocurrency platform, for extensive violations of AML and counter-terrorist financing laws.

The investigation revealed:

❌ Failure to file over 1,000 suspicious transaction reports.

❌ Failure to report 1,518 large virtual currency transactions exceeding $10,000.

❌ No AML / CTF policies or internal hasztag#risk procedures.

❌ Failure to follow ministerial directives and to document AML risk assessments.

Photo: https://pl.freepik.com/

Many unreported transactions were linked to serious crimes, including:

➡️ Child sexual abuse material,

➡️ Fraud and scams,

➡️ Ransomware payments, and

➡️ Sanctions evasion.

I’ve said it many times: cryptocurrency, in its current state, has become one of the biggest enablers of global cybercrime. There are honest projects and companies working to bring innovation, but the reality is harsh: the anonymity and decentralization that make crypto appealing also make it the perfect laundering tool for criminals.

When we look at the long list of scandals, it becomes clear this is not an isolated problem:

➡️ OneCoin – $4 billion fraud: marketed as a legitimate cryptocurrency, but it was nothing more than a Ponzi scheme.

➡️ FTX – $8 billion collapse: one of the biggest financial crimes in history, with customers’ assets misused and billions vanished overnight.

➡️ BitConnect – $3.45 billion scam: promising “guaranteed returns,” it ended in one of the largest crypto Ponzi schemes ever.

➡️ QuadrigaCX – $215 million vanished: with the death of its founder, access to cold wallets was lost, and conspiracy theories about fraud erupted.

➡️ Thodex, PlusToken, WoToken, and Mirror Trading International — all multi-million-dollar frauds affecting investors worldwide.

➡️ In Poland, the co-owner of the Bit Market cryptocurrency exchange was found dead (two shots to the head) in 2019 amid financial irregularities and mounting legal troubles surrounding the exchange's collapse.

Additionally:

➡️ Crypto crime and ransomware are two sides of the same coin.

➡️ The lack of transparency, AML enforcement, and monitoring makes the digital currency ecosystem a magnet for threatactors.

➡️ Regulatory loopholes and a culture of secrecy allow cybercriminals to operate freely.

➡️ It’s a global money laundering mechanism disguised as decentralization.

Link

Author: Sebastian Burgemejster