KuCoin Faces Record $14 Million AML Fine After Failing Canadian Reporting Rules

Canada’s financial intelligence agency has imposed its largest ever anti-money laundering penalty on the operator of crypto exchange KuCoin, fining Seychelles-based Peken Global Limited $14.09 million (C$19.6 million).

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) said the company failed to register as a foreign money services business and neglected to report nearly 3,000 large virtual currency transactions between 2021 and 2024.

What Violations Led to the Record Fine

FINTRAC identified multiple breaches of Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

The agency noted 33 instances where KuCoin did not flag suspicious transactions potentially linked to money laundering or terrorist financing.

The regulator described these violations as particularly “serious” and, in some cases, “severe.”

According to the agency, the fine represents the bulk of its enforcement actions over the past year, which included 23 penalties totalling $25 million.

KuCoin Disputes FINTRAC’s Findings and Appeals

KuCoin has strongly rejected FINTRAC’s decision.

In a statement, the company called the fine “excessive and punitive” and said it had submitted an appeal to the Federal Court of Canada, arguing it should not be classified as a Foreign Money Services Business under Canadian law.

CEO BC Wong added on social media platform X,

“We disagree with this decision on both substantive and procedural grounds.”

Regulatory Pressure Comes Ahead of Global Audit

FINTRAC’s enforcement comes ahead of a November audit by the Paris-based Financial Action Task Force (FATF), which will review Canada’s systems for combating financial crime.

The scrutiny adds pressure on Canada to demonstrate robust oversight, especially after the country’s largest cryptocurrency seizure to date, in which the Royal Canadian Mounted Police took control of over $40 million from the now-defunct exchange TradeOgre.

KuCoin’s Past Regulatory Challenges

This is not KuCoin’s first encounter with regulators.

In 2023, the Ontario Securities Commission fined the exchange $2 million and prohibited it from operating in provincial capital markets for running an unregistered trading platform.

Earlier this year, KuCoin also settled with the U.S. Department of Justice for nearly $300 million after pleading guilty to operating an unlicensed money services business and agreeing to cease U.S. operations.

KuCoin Expands into Thailand Despite Regulatory Setbacks

Despite its regulatory troubles, KuCoin is moving forward with international initiatives.

Last month, Thailand’s Ministry of Finance selected KuCoin as a partner for the G-Token program, a blockchain-based digital bond scheme.

The project involves 5 billion baht (US$153 million) in tokenized bonds, fully backed by the Thai baht, with a minimum investment of just $3, aiming to make government securities accessible to retail investors.

KuCoin will help manage subscriptions, redemptions, and listings, and advise on potential international expansion of the program, subject to regulatory approvals.

FINTRAC Emphasises Enforcement and Compliance

FINTRAC Director Sarah Paquet highlighted the importance of compliance, stating,

“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. We are firm in ensuring that businesses continue to do their part, and we will take appropriate actions when they are needed.”

The fine signals a tightening of regulatory oversight on global crypto exchanges operating in Canada, as authorities prepare for international evaluation and continue efforts to prevent financial crimes.