Canada has imposed its largest-ever anti-money laundering (AML) fine for USD 14 million on KuCoin, operated by Seychelles-based Peken Global Limited, for significant compliance failures between 2021 and 2024. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) issued the penalty following KuCoin’s failure to register as a foreign money services business and neglect to report nearly 3,000 virtual currency transactions exceeding $10,000. The exchange also missed reporting 33 suspicious transactions potentially linked to money laundering and terrorist financing. KuCoin has strongly disputed the fine, calling it excessive and has appealed the decision in the Federal Court of Canada.
Background and Details of the Fine
FINTRAC, Canada’s financial intelligence agency, announced the historic fine amounting to 19.6 million Canadian dollars (approximately USD 14 million) to Peken Global Limited, the operator behind KuCoin, citing serious violations of Canada’s anti-money laundering laws. The fine is the largest single enforcement action by FINTRAC to date. The breaches include:
- Failure by KuCoin to register legally as a foreign money services business within Canada.
- Omission to report almost 3,000 transactions of virtual currency above $10,000 CAD, a legal requirement under Canadian AML regulations.
- Failure to submit 33 reports on suspicious cryptocurrency transactions that could be tied to criminal activities and terrorism financing.
FINTRAC classified these compliance lapses as ranging from “serious” to “very serious,” warning that such misconduct undermines Canada’s efforts to curb financial crimes.
Regulatory Context and Canada’s AML Framework
The penalty comes amid Canada’s broader crackdown on cryptocurrency exchanges, reinforcing the responsibilities these platforms have in preventing illicit financial flows. Recent regulatory initiatives in Canada include the implementation of the Retail Payment Activities Act, extending oversight to wallet and stablecoin operators and adding protections and risk controls for digital assets. These measures align with enhanced scrutiny ahead of an upcoming global Financial Action Task Force (FATF) audit scheduled for November, emphasizing Canada’s commitment to global AML standards.
Sarah Paquet, Director and CEO of FINTRAC, stressed the importance of stringent regulatory frameworks, noting that these rules are designed to protect Canadians and preserve the stability of the financial system. She affirmed FINTRAC’s resolve to act decisively against entities that fail to uphold their AML obligations.
KuCoin’s Response and Appeal
KuCoin firmly rejects FINTRAC’s findings and the imposed penalty. The company argues that it acted in compliance with necessary regulations and disputes its classification as a foreign money services business under Canadian law. Describing the fine as “excessive and punitive,” KuCoin has submitted an official appeal to the Federal Court of Canada seeking to overturn or reduce the penalty. The exchange also emphasized its ongoing efforts to enhance compliance and transparency despite facing regulatory pressures in multiple jurisdictions.
KuCoin’s legal challenges continue following previous penalties, including a 2023 sanction by the Ontario Securities Commission for securities law violations, as well as a substantial settlement with the U.S. Department of Justice earlier in 2025, where KuCoin agreed to pay nearly $300 million and cease U.S. operations. These ongoing disputes signal the complex regulatory environment faced by global cryptocurrency exchanges.
Implications for the Cryptocurrency Industry
This landmark case in Canada underscores the tightening regulatory landscape for cryptocurrency exchanges worldwide, highlighting the increasing demands for compliance with AML and counter-terrorism financing (CTF) measures. KuCoin’s appeal could set a precedent for how regulators enforce AML rules on foreign crypto exchanges operating in Canadian markets. It illustrates the tension between innovation in digital finance and the need for robust safeguards against illicit financial activities.
The outcome of KuCoin’s appeal may influence future regulatory frameworks and enforcement approaches, striking a balance between fostering technological innovations in digital assets and ensuring the financial system’s integrity and security.