KuCoin Appeals Record $14.5M Canada Money Laundering Fine, Calls It ‘Excessive’

Crypto exchange Kucoin has appealed against a record $14.5 million (C$19.6 million) fine imposed by Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC), calling it ”excessive.”

The fine was levied against Kucoin’s operating entity, Peken Global Limited, for non-compliance with anti-money laundering (AML) regulations between June 2021 and May 2024. It is the largest in Canadian history.

Details of Regulatory Non-Compliance and Enforcement Action

The Canadian regulator found that the platform committed three major infractions: failing to register as a Foreign Money Services Business (FMSB), neglecting to report nearly 3,000 large virtual currency transactions exceeding C$10,000, and failing to flag 33 separate instances of suspicious activity, some of which were linked to illicit operations like darknet marketplaces and ransomware.

FINTRAC classified the failure to file suspicious transaction reports as a “very serious” violation that resulted in a “loss of critical information” for law enforcement.

KuCoin’s appeal with the Federal Court of Canada cites both substantive and procedural grounds. The core of its argument is a strong disagreement with FINTRAC’s classification of the platform as an FMSB and a claim that the penalty is “excessive and punitive in nature.”

Earlier this year, Kucoin paid $300 million for a settlement with the US Department of Justice (DOJ), which led to the platform’s exit from the American market, and in 2023 was fined by the Ontario Securities Commission (OSC) for operating an unregistered platform.