KuCoin's $14M AML Appeal Tests Canada's Foreign Crypto Rules

Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC) has imposed a record administrative monetary penalty of C$19.55 million (US$14 million) on KuCoin, a Seychelles-incorporated cryptocurrency exchange operating in Canada, for violations of anti-money laundering (AML) regulations FINTRAC announces administrative monetary penalty^[1]. The penalty, announced on July 28, 2025, follows an investigation that revealed Peken Global Limited, KuCoin’s parent company, failed to register with FINTRAC as a foreign money services business (FMSB), neglected to report nearly 3,000 large virtual currency transactions exceeding $10,000, and omitted submitting 33 suspicious transaction reports linked to potential money laundering or terrorist financing activities KuCoin faces USD14M Canadian action in registration, money laundering controls dispute^[2]. FINTRAC emphasized that these failures undermined Canada’s AML framework, which aims to safeguard economic security and support law enforcement investigations FINTRAC announces administrative monetary penalty^[1].

The violations spanned from 2021 to 2024, during which KuCoin’s operational lapses were deemed “serious” and, in the case of suspicious transaction reporting, “severe” by FINTRAC Canada fines KuCoin $14M for anti-money laundering failures^[3]. The agency highlighted that large virtual currency transactions and suspicious activity reports are critical for generating actionable intelligence to combat financial crimes. KuCoin’s failure to comply with these requirements, FINTRAC stated, created vulnerabilities that could have been exploited for illicit purposes FINTRAC announces administrative monetary penalty^[1]. The penalty aligns with FINTRAC’s broader enforcement strategy, which saw 23 violations addressed in 2024–25, totaling over $25 million in penalties FINTRAC announces administrative monetary penalty^[1].

KuCoin has contested the fine, filing an appeal with Canada’s Federal Court on both procedural and substantive grounds. The exchange disputes its classification as an FMSB under Canadian law and argues the penalty is “excessive and punitive” KuCoin faces USD14M Canadian action in registration, money laundering controls dispute^[2]. In a statement, KuCoin reiterated its commitment to regulatory compliance but maintained that the enforcement action mischaracterizes its business model. The appeal could set a precedent for how Canadian regulators apply AML obligations to foreign crypto platforms serving Canadian users KuCoin appeals C$19 million Canadian penalty over AML failures^[5].

This is not the first regulatory challenge for KuCoin. In 2023, the Ontario Securities Commission (OSC) penalized the exchange for operating without registration, and earlier in 2025, it settled with the U.S. Department of Justice (DOJ) for nearly $300 million after pleading guilty to running an unlicensed money services business. The U.S. case also required KuCoin to forfeit $150 million in illicit proceeds and strengthen its compliance program under a three-year monitoring agreement Canada fines KuCoin $14M for anti-money laundering failures^[3]. These actions underscore global regulatory scrutiny of crypto platforms, particularly those operating across jurisdictions with differing compliance standards.

The enforcement action against KuCoin comes as Canada prepares for an audit by the Financial Action Task Force (FATF) in November, which will assess the country’s adherence to international AML standards. FINTRAC’s chair, Sarah Paquet, stressed that the agency’s firm enforcement measures are essential to maintaining trust in Canada’s financial system. “We are firm in ensuring that businesses continue to do their part and will take appropriate actions when needed,” Paquet stated FINTRAC announces administrative monetary penalty^[1]. The penalty against KuCoin represents the largest single enforcement action in FINTRAC’s history, accounting for roughly 78% of the agency’s total penalties issued in the past year Canada fines KuCoin $14M for anti-money laundering failures^[3].

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