Cryptocurrency exchange KuCoin is challenging a significant enforcement action by Canada's Financial Transactions and Reports Analysis Centre (FINTRAC), which resulted in a penalty exceeding $14 million USD. The regulatory body accused the Seychelles-based platform of operating as an unregistered money-services business and maintaining inadequate anti-money laundering (AML) controls.
FINTRAC's investigation revealed that KuCoin failed to report substantial cryptocurrency transactions on nearly 3,000 separate occasions between 2021 and 2024. Additionally, the exchange neglected to flag 33 suspicious transactions potentially linked to money laundering or terrorist financing activities.
KuCoin has formally appealed the decision to the Federal Court of Canada, contesting both the classification as a Foreign Money Services Business and the magnitude of the penalty, which the exchange characterizes as excessive and punitive. Despite this legal challenge, KuCoin reaffirmed its commitment to regulatory compliance and operational transparency.
This penalty constitutes the majority of FINTRAC's enforcement actions over the past year, during which the agency imposed 23 separate fines totaling $25 million. The regulator emphasized the seriousness of KuCoin's compliance failures, particularly regarding unreported suspicious transactions.
The Canadian action represents the latest in a series of regulatory challenges for KuCoin across multiple jurisdictions, including previous settlements with U.S. authorities and regulatory actions by the Ontario Securities Commission.