MP Technology Services Ltd Hit With CAD 536,853 Penalty Over Serious AML Compliance Breaches

MP Technology Services Ltd, a key subsidiary of crypto payments firm MoonPay Inc, has been levied an administrative monetary penalty totaling CAD 536,853.35 after regulators concluded the company committed multiple compliance failures within Canada’s financial system.

The enforcement decision was finalized on November 20, 2025, and publicly disclosed in mid-December following a detailed compliance review by national financial authorities. The company, which is incorporated in Seychelles and provides international money transfer services to Canadian residents, was found to have violated core obligations related to reporting, internal controls, and risk management—deficiencies that significantly obstructed regulators’ ability to monitor cross-border financial activity and detect potential illicit flows.

Officials underscored that the penalty is intended to correct these failures and reinforce adherence to safeguards designed to protect the domestic economy.

Safeguarding the integrity of Canada’s financial system depends on strict adherence to anti-money laundering and counter-terrorist financing requirements by every market participant.

For money services businesses operating across borders, these requirements are mandatory under federal law. According to the regulatory assessment, MP Technology Services Ltd demonstrated systemic non-compliance, particularly in its failure to document internal compliance procedures and to properly report high-value international electronic funds transfers. Authorities noted that when firms neglect to register and report transfers exceeding the CAD 10,000 threshold, critical gaps emerge in regulatory oversight. These reports allow Canada’s financial intelligence unit to trace the movement of funds and identify patterns that may indicate money laundering or the integration of criminal proceeds. By failing to submit such reports, the company effectively removed itself from a national security framework designed to protect the financial system.

In addition to transaction reporting failures, regulators cited the firm for lacking formally documented and senior-approved internal controls. Effective compliance frameworks require written policies and procedures that are comprehensive, current, and aligned with evolving legislative requirements. Just as importantly, these policies must be approved by a senior officer to ensure accountability at the highest levels of corporate governance. The absence of such approval pointed to a breakdown in the firm’s compliance culture. Without clear, authoritative guidance, employees are left without a defined roadmap, significantly increasing the risk of both inadvertent and deliberate violations. Regulators emphasized that foreign incorporation does not exempt a company from meeting Canada’s stringent compliance standards when it provides services to residents.

A second major deficiency identified during the examination was the company’s failure to conduct and document a formal risk assessment. Modern regulatory expectations require a risk-based approach that considers customer profiles, geographic exposure, and the nature of products and services offered. MP Technology Services Ltd did not adequately document such an assessment, suggesting it failed to understand or address its specific exposure to financial crime risks. This included heightened risks associated with transfers involving jurisdictions known for elevated levels of illicit financial activity. Without a documented analysis, the firm could not effectively allocate compliance resources to higher-risk areas, leaving vulnerabilities that could be exploited by criminal actors.

Regulators also highlighted the company’s repeated failure to file suspicious transaction reports despite identifying transactions that raised clear red flags. Canada’s financial intelligence unit relies heavily on these reports to generate leads for law enforcement and national security agencies. During the review, examiners found that MP Technology Services Ltd had internally flagged several attempted transactions but failed to report them to authorities. These transactions were linked to high-risk segments of the digital economy, making the omission particularly serious. By identifying suspicious conduct and withholding that information, the company effectively concealed potentially criminal activity from government oversight. Regulators characterized this failure as especially grave, as it undermines the primary objective of the reporting regime: detecting and disrupting harmful financial activity before it causes broader societal harm.

Further examination revealed troubling details about the nature of the unreported transactions. Authorities determined that the company had declined numerous transfers associated, either directly or indirectly, with darknet marketplaces—platforms widely known for facilitating the trade of illegal drugs, weapons, and stolen data through the use of digital currencies. Some transactions also involved exposure to sanctioned individuals or entities that have been excluded from the financial system due to links to terrorism, human rights violations, or other serious international crimes. The failure to report these attempts constituted a significant breach of the firm’s obligation to support the enforcement of international sanctions and the integrity of the global financial system.

Even more concerning were links identified between certain declined transactions and child sexual abuse material. Regulators described the failure to report such activity as a profound lapse in both legal and social responsibility. Financial intelligence related to these crimes is often critical in enabling law enforcement to identify perpetrators, dismantle criminal networks, and rescue victims. By retaining this information internally instead of reporting it, the firm obstructed a crucial investigative pathway. Authorities emphasized that reporting such transactions is an essential component of Canada’s broader strategy to combat online exploitation, and the severity of the penalty reflects the seriousness of these omissions.

The action against MP Technology Services Ltd forms part of a broader pattern of intensified enforcement by Canada’s financial regulator. In the current fiscal year, the agency has issued more than 23 notices of violation—the highest number in its history—with total penalties exceeding CAD 25 million. This marks a decisive shift from a guidance-focused approach to one centered on strict accountability, driven by the increasing sophistication of financial crime. Regulators have made clear they will actively pursue and penalize firms that fail to implement required safeguards, across both emerging digital finance platforms and traditional sectors such as banking, gaming, and real estate.

Officials said the penalty sends a clear message to international firms operating in Canada: providing services to Canadian residents requires full compliance with domestic laws, regardless of where a company is headquartered. Administrative monetary penalties are intended to make non-compliance more costly than investing in effective compliance systems. As digital finance continues to expand, scrutiny of money services businesses is expected to intensify. Companies that do not strengthen their internal controls, risk assessments, and reporting mechanisms risk facing similar—or greater—sanctions in the future.

As a reporting entity, MP Technology Services Ltd was legally obligated to maintain a robust compliance regime and to report all transactions that met statutory thresholds or raised reasonable suspicion. The CAD 536,853.35 penalty was imposed after regulators identified four distinct violations during a routine compliance examination. These included systemic failures to report transfers exceeding CAD 10,000, the absence of updated and senior-approved internal policies, and the failure to report transactions linked to darknet markets, sanctioned entities, and child sexual abuse material. Regulators described the case as emblematic of a record-breaking year for enforcement activity, reflecting a firm commitment to using financial penalties as a primary tool to uphold national security and financial integrity laws.

By fLEXI tEAM