B.C.-incorporated cryptocurrency firm appeals record 176 million Fintrac penalty

Xeltox Enterprises Ltd. , a British Columbia-based cryptocurrency firm, is appealing a record $176 million penalty levied by Canada's anti-money-laundering agency, Fintrac. The company filed its appeal in Federal Court, arguing that Fintrac's assessment involved “errors of law. ” Xeltox contends it was penalized for failing to report over 7,500 suspicious transactions, many linked to Iran, which it states were beyond its control. The firm licenses its software from a Panama-based company and claims that Fintrac incorrectly assumed it was the same as the foreign entity responsible for the violations.

Fintrac's CEO, Sarah Paquet, pointed out that the case involved serious offenses, including child sexual abuse material, fraud, and ransomware payments. This situation underscores the complexities surrounding regulatory compliance in the cryptocurrency sector. Moreover, Xeltox argues that the alleged infractions were not committed by its Canadian operations but by foreign licensees. The outcome of this appeal could significantly impact how cryptocurrency businesses operate within Canadian regulatory frameworks.