Canadian authorities have imposed a major administrative monetary penalty of $176 million on the cryptocurrency payment platform Cryptomus. The fine was issued by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the country’s national financial intelligence unit responsible for combating money laundering and terrorist financing.

The enforcement action follows a determination that Cryptomus was operating in violation of Canadian anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. The platform was identified as being non-compliant with fundamental requirements for entities dealing in virtual currency.

Failure to Register and Report

According to FINTRAC, a primary reason for the penalty was Cryptomus’s failure to register as a foreign money services business (FMSB) with the agency. Under Canadian law, any platform that directs and provides services to clients in Canada is required to register, regardless of where the company is physically located. This registration is a key component of the country’s regulatory framework for virtual asset service providers.

In addition to its failure to register, Cryptomus did not report large virtual currency transactions as required by law. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act mandates that entities report all cryptocurrency transactions valued at $10,000 CAD or more in a 24-hour period. The absence of these reports hindered the ability of regulators to track potentially illicit funds.

A Stand Against Cybercrime Facilitation

The substantial $176 million penalty underscores the severity of the violations. By operating without proper registration or transaction reporting, the platform created an environment conducive to cybercrime, allowing anonymous transactions that are often linked to ransomware payments, fraud, and other illegal activities. FINTRAC’s action signals a firm stance against platforms that facilitate the movement of illicit funds and fail to meet their compliance obligations.

This penalty serves as a significant precedent in Canada’s efforts to regulate the digital asset sector. It emphasizes that all virtual currency platforms serving Canadians must adhere to the same stringent AML/CTF standards as traditional financial institutions to ensure the integrity of the financial system.