An offshore crypto trading platform is being sanctioned by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) for compliance violations, including a failure to report attempted suspicious transactions that involved “darknet” markets.
FINTRAC imposed an administrative monetary penalty of $536,853.35 on MP Technology Services Ltd., a subsidiary of MoonPay Inc. that was operating as a foreign money services business in Canada after a compliance exam uncovered four breaches of the anti-money laundering rules.
According to a notice from FINTRAC issued Thursday, the most serious breach was its failure to report several attempted transactions where there were “reasonable grounds” to suspect that the transactions involved money laundering or a terrorist financing offence.
“FINTRAC’s review found that a majority of these transactions were declined due to wallet addresses being flagged by transaction monitoring systems for having direct or indirect exposure to darknet marketplaces, sanctioned entities, or child sexual abuse material,” it said.
The agency said that while the clients that attempted these transactions were removed from the platform after the firm flagged these risks, the transactions weren’t reported to FINTRAC as required, which prevented it from collecting financial intelligence and carrying out its mandate to guard against illicit financial activity.
The enforcement action also covered two other “serious” violations and one “minor” violation, FINTRAC said — including having incomplete compliance policies, that its’ risk assessment processes didn’t meet Canada’s requirements, and failing to report an incoming transfer that exceeded the $10,000 threshold.