KuCoin crypto exchange has taken legal action against a major penalty imposed by Canadian regulators, arguing that the decision is unfair and excessive.
The case stems from a $19 million CAD ($14 million USD) fine levied by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The regulator claims KuCoin repeatedly ignored mandatory reporting requirements designed to detect and prevent money laundering and terrorist financing.
FINTRAC Findings
According to FINTRAC, KuCoin failed to register as a money-services business in Canada, a basic requirement for platforms facilitating crypto transactions.
The agency said that between 2021 and 2024, the exchange failed to report nearly 3,000 large transactions involving cryptocurrency. Additionally, regulators identified 33 separate instances where KuCoin failed to flag suspicious activity. These lapses included instances that could have been linked to criminal or terrorist networks.
FINTRAC described the company’s violations as “severe”, stressing that reporting obligations are central to Canada’s financial monitoring framework. Officials said that lapses of this scale undermine efforts to safeguard the country’s financial system from abuse.
The penalty against KuCoin represents the largest portion of all fines imposed by FINTRAC over the past year. During that time, the agency issued 23 penalties totaling about $25 million.
KuCoin Pushes Back
In response, KuCoin confirmed it has filed an appeal with the Federal Court of Canada. The company stated that it disagrees with both the findings and the severity of the penalty.
“While KuCoin respects the decision-making process and remains committed to compliance, we do not agree with the conclusion that we operate as a Foreign Money Services Business in Canada,” the firm stated.
KuCoin also described the fine as “excessive and punitive in nature”. It argues that it does not accurately reflect the company’s ongoing efforts to improve transparency and regulatory engagement.
Pattern of Global Scrutiny
This is not the first time KuCoin has faced legal and regulatory challenges. In 2023, the Ontario Securities Commission (OSC) penalized the platform for failing to comply with Canadian securities laws.
Earlier this year, the exchange settled with the U.S. Department of Justice (DOJ). Under the agreement, KuCoin pleaded guilty to operating without proper licensing and agreed to pay nearly $300 million. As a further condition, the company committed to fully withdrawing from the American market.
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