Fintrac says Peken Global failed to register with Fintrac as a foreign money services business, failed to report large virtual currency transactions, and failed to submit suspicious transaction reports. Agency director and CEO Sarah Paquet said in a statement that the rules are in place to protect Canadians and the economy, and that Fintrac works with businesses to help them understand and comply with their obligations. “We are also firm in ensuring that businesses continue to do their part and we will take appropriate actions when they are needed,” she said.
KuCoin said it strongly disagrees with the agency’s findings and penalty, and maintains that it should not be classified as a foreign money services business. “We disagree with this decision on both substantive and procedural grounds, and we have pursued all available legal avenues to ensure a fair outcome for KuCoin,” said chief executive BC Wong, in a statement. “As always, we remain fully committed to transparent operations and compliance with all applicable laws.”
KuCoin’s troubles extend beyond Canada, with major U.S. penalties
The failures include almost 3,000 transactions of over $10,000 the company should have reported between June 1, 2021, and May 8, 2024, in what Fintrac classified as a minor violation.
The watchdog says the company also failed in 33 cases to report transactions where there were reasonable grounds to suspect they were related to money laundering or terrorist financing, in what it categorized as severe non-compliance or a very serious violation, and said represents a loss of critical information. The suspicious cases included transactions between Peken Global Ltd. and large dark web or illegal digital marketplaces suspected of facilitating harmful cyber activities in Canada and the sale of illegal goods and services, the agency said.
It’s not the first time the company has run into trouble with authorities. The company pleaded guilty in January to operating an unlicensed money transmitting business in the United States and agreed to pay penalties totalling more than US$297 million, the U.S. Attorney’s Office said. The U.S. settlement also included the company agreeing to leave the U.S. market for at least two years and for two of KuCoin’s founders to no longer have any role in the company’s management or operations.
KuCoin was founded in 2017 and says it serves users across more than 200 countries and regions.
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