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Canada Hits Crypto Firm Xeltox with Record C$176.9 Million Fine for Money Laundering

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Canada’s anti-money laundering watchdog FINTRAC has imposed a record C$176.9 million ($126 million) penalty on Xeltox Enterprises Limited, citing the company’s failure to report suspicious transactions linked to child sexual abuse material, fraud, ransomware, and sanctions evasion.

The fine marks the largest enforcement action in FINTRAC’s history, underscoring Ottawa’s growing crackdown on financial crime in the crypto industry.

Xeltox, also known as Cryptomus and previously operating as Certa Payments Limited, is registered as a money services business in British Columbia. The company could not be reached for comment.

“Given that numerous violations in this case were connected to trafficking in child sexual abuse material, fraud, ransomware payments and sanctions evasion, FINTRAC was compelled to take this unprecedented enforcement action,” the agency said in a statement.

FINTRAC said Xeltox repeatedly failed to submit suspicious transaction reports when there were reasonable grounds to suspect links to criminal activity. The firm also did not report receipts of over C$10,000 in virtual currency as required under Canadian law.

The announcement comes amid a broader national push to combat money laundering. Earlier this week, the federal government unveiled plans for a new agency focused on fraud prevention, anti-money laundering efforts, and asset recovery.

Canada will also undergo an audit by the Financial Action Task Force (FATF) next month, a key global body assessing compliance with international standards on financial crime.

Just last month, FINTRAC issued a C$19.6 million penalty against Peken Global Limited, operator of the KuCoin crypto exchange, which had been the largest fine until now. KuCoin has appealed, calling the sanction “excessive and punitive.”

The new penalty against Xeltox signals that Canadian regulators are escalating their enforcement stance, targeting crypto intermediaries that fail to meet anti-money laundering and counter-terrorism financing obligations.

Brazilian Police Bust Deepfake Scam Using Gisele Bündchen’s Image in Instagram Ads

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Brazilian authorities have dismantled a nationwide fraud network that used deepfake videos of supermodel Gisele Bündchen and other celebrities in Instagram ads to trick victims into buying fake products, marking one of the country’s first major crackdowns on AI-powered online scams.

Police arrested four suspects this week and froze assets across five states, after investigators traced more than 20 million reais ($3.9 million) in suspicious transactions uncovered by Brazil’s anti–money laundering agency COAF.

The investigation began in August 2024, when a victim reported being deceived by an Instagram ad showing an AI-generated video of Bündchen promoting a nonexistent skincare product. Another fraudulent campaign featured the supermodel supposedly offering free suitcases, with users asked to pay only for shipping—items that never arrived.

According to Eibert Moreira Neto, head of the cybercrime unit in Rio Grande do Sul, the group created a “series of scams” using deepfakes of multiple celebrities and fake betting platforms. Investigators believe the criminals operated at mass scale, collecting many small payments—usually under 100 reais ($19)—from victims who rarely reported the losses.

“That created a perverse situation,” explained investigator Isadora Galian. “The criminals enjoyed a kind of statistical immunity—they knew most people would not complain, so they operated without fear.”

Meta, owner of Instagram, said its policies ban ads that deceptively use public figures and that such content is removed “when detected.” The company added that it uses AI-based detection systems, trained review teams, and reporting tools to fight celebrity-impersonation scams.

A spokesperson for Bündchen’s team urged consumers to verify suspicious offers, avoid ads promising unrealistic discounts or giveaways, and report fraudulent content to authorities or official brand channels.

The case has broader implications for Brazil’s fight against digital deception. In June 2024, the Supreme Court ruled that social media platforms can be held liable for criminal ads if they fail to remove them swiftly—even without a court order.

The Rio Grande do Sul operation underscores the growing criminal use of deepfake technology, which allows scammers to replicate celebrity likenesses with stunning realism. What once required Hollywood budgets can now be done with cheap AI tools and a few clicks—a reality that’s forcing regulators, platforms, and the public to confront a new era of synthetic fraud.

U.S. Treasury’s Bessent to Meet China’s He Lifeng in Madrid on Trade, TikTok, and Money Laundering

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U.S. Treasury Secretary Scott Bessent will meet Chinese Vice Premier He Lifeng in Madrid next week for high-level talks covering trade, TikTok, and illicit finance, the Treasury said Thursday. The meetings, set for September 12–18, coincide with Bessent’s trip to Spain and Britain, ahead of his participation in President Donald Trump’s state visit to the UK (Sept. 17–19).

Focus Areas

  • Trade and Tariffs: The talks mark the fourth major in-person meeting between Bessent and He this year, as Washington and Beijing seek to uphold a fragile trade truce. A July meeting in Stockholm resulted in a 90-day tariff pause extension, approved by Trump until November 10. U.S. tariffs on Chinese goods remain steep at ~55%, with agriculture a sticking point. Washington accuses China of shifting farm imports to Brazil and Argentina, undercutting U.S. soybean farmers.

  • TikTok Deadline: ByteDance’s short-video platform faces a U.S. ban unless it is sold to U.S. ownership. Trump extended TikTok’s divestment deadline to September 17. Treasury confirmed the app will be discussed in Madrid, after not featuring in July’s talks.

  • Money Laundering Cooperation: Both sides will address illicit finance, which Washington links to Chinese banks allegedly enabling Russia’s access to military technologies amid the Ukraine war. Treasury retains the authority to sanction Chinese banks involved in such transfers, though it has not yet exercised it.

Broader Context

The Madrid meeting comes as the world’s two largest economies attempt to stabilize relations:

  • Rare earth exports from China to the U.S. were restored under the current truce.

  • However, agriculture and tariffs remain unresolved, with U.S. farmers facing a shrinking share of the Chinese market.

  • Trump has maintained high tariffs on Chinese goods, including those tied to fentanyl supply chain disputes.

The outcome of the Madrid talks remains uncertain, particularly on farm trade or tariff relief, but the inclusion of TikTok and money laundering suggests Washington is broadening the agenda beyond traditional trade disputes.