Crypto Exchange KuCoin Hit With Record Anti-Money Laundering Penalty in Canada

Peken Global Limited, which operates as crypto exchange KuCoin, is facing a $14 million—over $19.5 million CAD—anti-money laundering penalty from Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC), the agency announced on Thursday. 

The Seychelles-based firm was hit with the penalty—the largest ever imposed by FINTRAC, according to Reuters—in July for failing to comply with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, FINTRAC said. 

“Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime is in place to protect the safety of Canadians and the security of Canada’s economy,” said FINTRAC Director and CEO Sarah Paquet, in a statement.

“FINTRAC works with businesses to help them understand and comply with their obligations under the Act,” she added. “We are also firm in ensuring that businesses continue to do their part, and we will take appropriate actions when they are needed.”

According to the release, KuCoin failed to register as a foreign services money business, did not report large virtual currency transactions above $10,000 CAD, and failed to report suspicious transaction reports even when there was grounds to do so. 

“While KuCoin respects the decision-making process and remains committed to regulatory compliance and transparency, it disagrees with both the finding that KuCoin is a Foreign Money Services Business and the penalty imposed, which KuCoin maintains is excessive and punitive in nature,” the exchange said in a statement.

The firm submitted an appeal before Canada’s Federal Court on substantive and procedural grounds. 

In January, KuCoin pleaded guilty to operating an unlicensed money transmitting business in the U.S. and agreed to pay almost $300 million in fines and forfeitures in a settlement.  

Its co-founders Chun Gan and Ke Tang were ordered to forfeit $2.7 million in cash, as well, and each left the firm after the settlement.