FINTRAC imposed a monetary penalty of nearly $700,000 on Edmonton-based peer-to-peer crypto dealer Necosmart (13010431 Canada Inc.) for five violations of AML regulations identified during a compliance review. The agency found one very serious breach for failing to report suspicious transactions despite reasonable grounds to suspect money laundering, alongside three serious violations and one minor breach. Necosmart failed to report transactions with indicators such as inconsistencies with clients' financial profiles, complex transaction structures, and dealings with high-risk jurisdictions. Additional violations included inadequate compliance policies, failure to apply enhanced due diligence on high-risk clients, and insufficient risk assessment of money laundering and terrorist financing risks. This enforcement underscores FINTRAC's focus on rigorous AML compliance within the crypto sector, particularly for peer-to-peer dealers.
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