Cryptocurrency exchange KuCoin is challenging a major enforcement action in Canada after regulators accused it of failing to register as a money services business and neglecting obligations to flag transactions potentially tied to money laundering or terrorism financing.
The penalty, imposed by Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC), amounts to more than $19 million Canadian dollars — roughly $14 million U.S. — and ranks among the highest fines issued by the agency in the past year. FINTRAC said KuCoin’s operator, Seychelles-based Peken Global Limited, failed to report thousands of transactions between 2021 and 2024.
Alleged failures and KuCoin’s defense
According to FINTRAC, KuCoin did not record nearly 3,000 large cryptocurrency transfers during the three-year period and, in 33 cases, failed to file reports when there were “reasonable grounds to suspect” the activity was tied to money laundering or terrorism financing. The regulator called the violations “serious,” and in cases involving suspicious activity, “severe.”
In a statement, KuCoin said it has filed an appeal with Canada’s Federal Court “on both substantive and procedural grounds.” The exchange argued that the penalty was excessive and punitive, while rejecting the finding that it qualified as a “foreign money services business” under Canadian law.
“While KuCoin respects the decision-making process and remains committed to compliance and transparency, it disagrees with both the classification and the penalty,” the company said Thursday.
Regulatory spotlight widens
The case highlights KuCoin’s ongoing regulatory struggles. The company was fined by Ontario’s Securities Commission in 2023 and earlier this year agreed to pay nearly $300 million in a U.S. Department of Justice settlement after pleading guilty to operating without a license. As part of that deal, KuCoin pledged to exit the U.S. market.
FINTRAC noted that KuCoin’s penalty represents the majority of the $25 million in fines it imposed over the past year across 23 enforcement actions, underscoring the agency’s heightened focus on compliance in the crypto sector.