KuCoin Challenges $19.55M FINTRAC Penalty in Canada Over Registration and Money Laundering Rules

One of the world’s largest crypto exchanges, KuCoin, is fighting back after Canada’s financial watchdog imposed one of the largest penalties in recent memory.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) says KuCoin, operated by Seychelles-based Peken Global Limited, failed to register as a foreign money-services business (MSB) and violated Canadian anti-money-laundering (AML) requirements. The result: a penalty of $19,552,000 CAD (approximately $14.1 million USD).

Why FINTRAC Imposed the Penalty

According to FINTRAC, KuCoin failed to file reports for 2,952 large virtual currency transactions (each ≥C$10,000) between June 2021 and May 2024. The regulator also identified 33 transactions where KuCoin failed to report reasonable grounds for suspected money laundering or terrorist financing, linked to activities like darknet markets and ransomware. FINTRAC classified these violations as “serious” to “very serious.”

This single case accounts for approximately 78% of fines imposed by FINTRAC in its 2024–25 fiscal year (April 1, 2024–March 31, 2025), totaling over $25 million CAD across 23 notices.

KuCoin’s Side of the Story

KuCoin has filed an appeal with the Federal Court of Canada, arguing the decision is both procedurally flawed and substantively unfair, particularly disputing its classification as a foreign MSB and the penalty’s “excessive and punitive” nature.

A Pattern of Regulatory Heat

This isn’t KuCoin’s first issue in Canada. In 2023, the Ontario Securities Commission (OSC) fined the exchange approximately C$2 million and imposed a permanent market ban for unregistered securities trading. Globally, KuCoin faced a major setback in January 2025, settling with the U.S. Department of Justice for over $297 million after pleading guilty to operating without proper licenses.

What This Means for Canadian Crypto Users

For Canadians using KuCoin or other offshore exchanges, this case signals intensifying regulatory scrutiny. FINTRAC and provincial regulators like the OSC are prioritizing compliance and AML protections ahead of Canada’s Financial Action Task Force (FATF) evaluation in November 2025. The appeal’s outcome could shape future rules for offshore crypto platforms in Canada.

Official KuCoin Statement

Original source:

“KuCoin Appeals FINTRAC Decision – Standing by Our Commitment to Compliance

KuCoin has received a decision from the Director of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) upholding a Notice of Violation issued on March 31, 2025.

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.

KuCoin has exercised its statutory right and formally submitted an appeal before the Federal Court of Canada on both substantive and procedural grounds.”

source https://ocryptocanada.ca/news/kucoin-challenges-19-55m-fintrac-penalty-in-canada-over-registration-and-money-laundering-rules/