FINTRAC fines Cryptomus C$126M for AML failures
FINTRAC has imposed a record C$126 million AML compliance fine on Vancouver-based crypto exchange Cryptomus, marking Canada’s largest-ever crypto fine. From July 1 to 31, 2024, Cryptomus failed to report over 1,000 suspicious transactions and 1,500 large transfers, breaching ministerial directives and neglecting key compliance updates. CEO Sarah Paquet cited links to child sexual exploitation content, ransomware payments, fraud and sanctions evasion. This underscores an intensifying cryptocurrency regulation trend, following the US DOJ’s US$504 million OKX penalty, a C$40 million seizure from TradeOgre and Hungary’s proposed jail terms for unregistered trading. Traders should brace for higher compliance costs, increased due diligence and a shift toward fully regulated exchanges as global regulators step up enforcement and reinforce the importance of robust AML compliance.
Bearish
In the short term, the record fine and intensifying AML compliance enforcement by FINTRAC may heighten regulatory risk perception, leading to reduced trading activity on smaller platforms and dampening market sentiment. Over the long term, however, stricter cryptocurrency regulation could bolster market stability by weeding out non-compliant exchanges and promoting migration to fully regulated venues, potentially reducing volatility. Overall, the current news is bearish due to immediate compliance cost pressures and increased due diligence requirements.