FINTRAC imposes largest penalty in Canadian history and the new Financial Crimes Agency

New Financial Crimes Agency

On October 20, 2025, the Government of Canada announced a series of Budget 2025 measures to protect Canadians against financial crimes. These measures are a part of the first-ever whole-of-government National Anti-Fraud Strategy. These measures are intended to strengthen the fight against financial crime and abuse by introducing new anti-fraud policies for banks, creating a Financial Crimes Agency, and developing a voluntary Code of Conduct to help financial institutions detect and prevent economic abuse.

The new Financial Crimes Agency will target complex financial crimes, including fraud, money laundering, organized crime activity, and online financial scams. The agency will unite specialized expertise across law enforcement and regulatory bodies to investigate sophisticated financial offences and recover illicit proceeds. The Minister of Finance, in collaboration with the Ministers of Justice and Public Safety, will introduce legislation by Spring 2026 to formally create the agency.

The largest penalty in Canadian history

On October 22, 2025, the Financial Transactions and Reports Analysis Centre of Canada (“FINTRAC”) published a public notice of an Administrative Monetary Penalty (“AMP”) it levied on Xeltox Enterprises Ltd., operating as Cryptomus. Cryptomus is a reporting entity that provides virtual currency transaction services. Cryptomus has a single owner from Uzbekistan, with no physical presence or employees in Canada, except for a Vancouver, B.C. mailing address. The AMP of $176,960,190 is the largest AMP issued by FINTRAC in Canadian history. Cryptomus was found non-compliant in 2,593 instances across 6 types of violations under Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated Regulations.

Nature of the violations

Violation #1

Failure to submit suspicious transaction reports (“STRs”) on 1,068 separate occasions in July 2024. Specifically, Cryptomus failed to file STRs where there were reasonable grounds to suspect that the transactions in question were related to proceeds connected to trafficking in child sexual abuse material, fraud, ransomware payments and sanctions evasion. These violations are classified as Very Serious violations.

Violation #2

Failure to comply with a Ministerial Directive relating to transactions associated with the Islamic Republic of Iran. Specifically, there were 7,557 instances where FINTRAC determined Cryptomus had failed to report transactions originating from Iran. These were also classified as Very Serious violations.

Violation #3

Failure to develop and apply written, up-to-date compliance policies and procedures that are approved by a senior officer. FINTRAC determined Cryptomus’ policies and procedures were inadequate and incomplete. This is classified as a Serious violation.

Violation #4

Failure to assess and document the risk of a money laundering or terrorist financing offence in the course of its activities, taking into consideration FINTRAC’s prescribed factors. This is classified as a Serious violation.

Violation #5

Failure to submit a notification of change to its money services business registration. Some of Cryptomus’ admissions during the compliance examination included: it only deals in virtual currency, despite what is indicated on its registration; the phone number provided is not associated with their company; the e-mail addresses provided were inaccessible; and their registration had not been updated to reflect their operating name, Cryptomus. These are classified as Serious violations.

Violation #6

Failure to report $10,000 or more in virtual currency from a client in a single transaction, together with the prescribed information that occurred on 1,518 separate occasions in July 2024. This is classified as a Minor violation.

Conclusion

Canada is intensifying its fight against financial crime with the creation of a new Financial Crimes Agency by Spring 2026, designed to coordinate national efforts against fraud, money laundering, organized crime, and online financial scams. The need for stronger enforcement is underscored by FINTRAC’s unprecedented $176.9 million penalty against Cryptomus for thousands of violations—highlighting the scale and sophistication of financial crime in Canada. If you are concerned that your business may be impacted, contact a member of our Financial Services or Compliance team for assistance.