Federal regulators have slapped a cryptocurrency dealer with a $536,853 penalty after uncovering serious compliance failures tied to suspected money laundering and terrorist financing, marking one of the largest fines levied against a crypto firm since Ottawa began regulating the sector in 2019.Blacklock's Reporter says the Financial Transactions and Reports Analysis Centre of Canada says the penalty was issued following a compliance examination that revealed multiple breaches of the Proceeds of Crime and Terrorist Financing Act. The fine was imposed on MP Technology Services Ltd., a subsidiary of U.S.-based MoonPay USA that is registered in the Seychelles.According to regulators, the bitcoin dealer failed to report four transactions where there were reasonable grounds to suspect links to money laundering or terrorist financing. Inspectors described the failures as “very serious” and said some of the transactions involved clients suspected of criminal activity.The company was also cited for failing to report a cash transaction of $10,000 or more, a violation regulators classified as minor but still significant. .That lapse was attributed to inadequate staff training, highlighting broader weaknesses in the firm’s compliance program.Regulators said company management appeared unfamiliar with Canadian legal requirements, noting that risk assessment procedures were not tailored to domestic legislation. The agency stressed that clear policies and procedures are essential to ensure compliance and communicate regulatory obligations to staff.Parliament moved to regulate cryptocurrency dealers in 2019 with the passage of Bill C-97, placing them under the same reporting and oversight rules as banks, casinos, real estate brokers, and currency exchangers. At the time, the federal finance department warned that virtual currencies posed significant money laundering and terrorist financing risks due to their anonymity and potential use in illicit transactions.Former finance minister Bill Morneau echoed those concerns in testimony before the Senate banking committee in 2018, arguing that stronger oversight was necessary to protect Canadians. He said crypto-assets were increasingly being used to launder criminal proceeds and required firm regulatory controls to prevent abuse.
