- KuCoin faces a $14 million penalty for breaking Canadian anti-money laundering rules.
- The fine, issued by FINTRAC, is the largest ever imposed by the Canadian agency.
- Authorities say KuCoin did not register properly and failed to report suspicious and large transactions.
- KuCoin has appealed the decision to Canada‘s Federal Court, calling the penalty excessive.
- Earlier this year, KuCoin pleaded guilty in the U.S. for operating without a license and paid nearly $300 million in penalties.
KuCoin, a crypto exchange operated by Seychelles-based Peken Global Limited, was penalized $14 million by Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC) for failing to comply with anti-money laundering laws. The agency announced the decision Thursday, stating that it is the largest fine FINTRAC has ever issued.
According to FINTRAC, KuCoin did not register as a foreign money services business, failed to report transactions involving more than $10,000, and did not submit reports on suspicious activities as required under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
FINTRAC Director Sarah Paquet said in a statement, “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.” 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.” In response, KuCoin stated it disagreed with the finding that it is a foreign money services business and called the penalty “excessive and punitive.” The company has appealed the ruling in Federal Court.
KuCoin also emphasized its commitment to working with regulators but maintains that the decision is unfair and is pursuing legal solutions both on substantive and procedural grounds.
In January, KuCoin admitted guilt in the United States for operating an unlicensed money transmitting business, agreeing to a settlement of nearly $300 million in fines and forfeitures. The company’s co-founders Chun Gan and Ke Tang were ordered to forfeit $2.7 million in cash, and both departed from the firm after the U.S. case.
The penalty from Canadian authorities represents the latest in a series of regulatory challenges for KuCoin as international agencies increase their scrutiny of crypto exchanges. For additional information on the fine, see this Reuters report.
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