Administrative monetary penalty on Peken Global Limited
[2025-09-25]
Peken Global Limited, also operating as KuCoin, a Seychelles-incorporated entity that was determined to be a foreign money services business operating in Canada, was imposed an administrative monetary penalty of $19,552,000 on July 28, 2025, for committing 3 violations. Peken Global Limited has appealed the penalty to the Federal Court.
Nature of violation
- Violation #1
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Failure to register with the Centre – Proceeds of Crime (Money Laundering) and Terrorist Financing Act, paragraph 11.1
Peken Global Limited failed to register as a foreign money services business with FINTRAC.
Peken Global Limited was provided with an opportunity to register with FINTRAC as a foreign money services business; however, it did not complete its registration by the deadline provided. While Peken Global Limited claimed that it was not a foreign money services business, FINTRAC determined that the entity met the foreign money services business criteria and, as a result, had an obligation to register. Specifically, it was determined that Peken Global Limited:
- Is engaged in the business of providing at least one money services business service.
- Does not have a place of business in Canada.
- Is directing services at persons or entities in Canada.
- Is providing these services to clients in Canada.
When a money services business does not register, FINTRAC is not able to effectively carry out its mandate, which is to ensure compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and help protect Canada's financial system from being exploited for money laundering and terrorist activity financing.
In this case, violation #1 is classified by regulations as a Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.
- Violation #2
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Failure to report a large virtual currency transaction of $10,000 or more in the course of a single transaction, together with the prescribed information – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 33(1)(f)
Peken Global Limited failed to submit large virtual currency transaction reports with the prescribed information.
Using blockchain analytics, FINTRAC identified that Peken Global Limited failed to report the receipt from a client of an amount in virtual currency of $10,000 or more in the course of a single transaction, together with the prescribed information, on 2,952 separate occasions during the period of June 1, 2021 to May 8, 2024. This is contrary to section 9(1) of theProceeds of Crime (Money Laundering) and Terrorist Financing Act and section 30(1)(f) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
Failure to submit a prescribed report such as a Large Virtual Currency Transaction Report results in a loss of intelligence for FINTRAC which may prevent it from using that information to carry out its mandate per paragraphs 40(b) and 40(d) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
In this case, violation #2 is classified by regulations as a Minor violation. The imposed penalty takes into account the criteria in section 73.11 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.
- Violation #3
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Failure to report financial transactions that occurred in the course of its activities and in respect of which there are reasonable grounds to suspect that the transactions are related to the commission or the attempted commission of a money laundering or a terrorist activity financing offence – Proceeds of Crime (Money Laundering) and Terrorist Financing Act, section 7
FINTRAC determined that, in 33 instances, Peken Global Limited failed to report financial transactions where there were reasonable grounds to suspect that the transactions were related to the commission or the attempted commission of a money laundering or a terrorist activity financing offence. The failure to submit suspicious transaction reports represents severe non-compliance. This omission results in the loss of critical financial information that could have been used by FINTRAC to produce actionable financial intelligence for the investigation and prosecution of money laundering and terrorist financing offences.
In these 33 instances, Peken Global Limited failed to report suspicious transactions to FINTRAC despite known indicators of potential money laundering or terrorist financing, as outlined below:
- Funds or virtual currency were added to or withdrawn from wallets with direct or indirect exposure to known suspicious sources, including darknet marketplaces, mixing/tumbling services, questionable gambling sites, illegal activities (e.g., ransomware), and/or theft reports.
- FINTRAC identified transactions between Peken Global Limited and large dark web or illegal digital marketplaces suspected of facilitating harmful cyber activities in Canada and the sale of illegal goods and services, posing risks to Canadians and businesses globally.
- Transactions involving persons or entities identified by the media, law enforcement or intelligence agencies as being linked to criminal activities.
- FINTRAC identified transactions where Peken Global Limited had credible information available on the persons or entities to reasonably suspect that the transactions were linked to money laundering or terrorist financing offences.
- Facilitating transactions that present indicators whereby clients operated chemical laboratories, supplement processing/packing businesses, or other chemical industry-adjacent operations that advertise cryptocurrency as a payment method for goods and services.
- FINTRAC identified transactions where Peken Global Limited had indirect exposure to a Canada-based company designated by the United States Office of Foreign Assets Control for distributing illicit precursor chemicals and equipment used to produce synthetic drugs.
In this case, violation #3 is classified by regulations as a Very Serious violation. The penalty imposed reflects the criteria outlined in section 73.11 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.
- Funds or virtual currency were added to or withdrawn from wallets with direct or indirect exposure to known suspicious sources, including darknet marketplaces, mixing/tumbling services, questionable gambling sites, illegal activities (e.g., ransomware), and/or theft reports.
Related link
- Date Modified: