FINTRAC levies record $20M penalty against KuCoin operator

Canada’s anti-money laundering agency has issued its largest-ever penalty to the operator of the KuCoin cryptocurrency exchange. On July 28, Fintrac imposed a fine of $19,552,000 on Peken Global Ltd., a Seychelles-registered company that operates KuCoin. Fintrac’s action accuses the firm of breaching Canadian anti-money laundering (AML) and anti-terrorist financing laws, and Peken Global has appealed the decision to the Federal Court.

Fintrac’s ruling identifies several compliance failures. According to the agency, Peken Global did not register as a foreign money services business in Canada, omitted to report nearly 3,000 virtual currency transactions exceeding $10,000 between June 1, 2021 and May 8, 2024, and failed to file suspicious transaction reports in a number of cases. Fintrac classified the omission to report the large transactions as a minor violation, but described 33 instances in which transactions that should have been reported as suspicious were not submitted as severe non-compliance—a very serious violation that, the agency says, resulted in the loss of important information.

Fintrac highlighted that some of the unreported suspicious transactions involved dealings between Peken Global Ltd. and marketplaces on the dark web or other illegal digital platforms. The agency said those marketplaces are suspected of facilitating harmful cyber activity in Canada and the sale of illegal goods and services—activities that heighten the risk of money laundering and the financing of criminal activity.

Sarah Paquet, director and CEO of Fintrac, emphasized the purpose of the regulatory framework: to protect Canadians and the integrity of the economy. “The rules are in place to protect Canadians and the economy,” she said, adding that Fintrac both helps businesses understand their obligations and will take enforcement action when necessary. The agency framed the penalty as an example of its commitment to ensuring that businesses subject to Canadian AML rules comply fully with reporting and registration requirements.

KuCoin’s operator strongly disputes Fintrac’s conclusions. In a statement, chief executive BC Wong said the company “strongly disagrees” with both the findings and the penalty and maintains it should not be categorized as a foreign money services business under Canadian law. Wong said KuCoin pursued all available legal avenues and remains committed to transparent operations and compliance with applicable laws. The company’s appeal to the Federal Court is underway.

KuCoin’s troubles extend beyond Canada, with major U.S. penalties

This enforcement action follows earlier regulatory and criminal resolutions in other jurisdictions. In the United States, the company pleaded guilty in January to operating an unlicensed money transmitting business and agreed to pay penalties totaling more than US$297 million, according to statements from U.S. authorities. That U.S. settlement also required the company to exit the U.S. market for at least two years and included restrictions on the involvement of two founders in the company’s management and operations.

Founded in 2017, KuCoin reports a global user base of approximately 40 million people and says it facilitates more than US$9 billion in daily trading volume. The exchange states that it serves users across more than 200 countries and regions. These characteristics—large user numbers and high transaction volumes—help explain why regulators scrutinize the company’s compliance with AML and counter-terrorist financing rules in multiple jurisdictions.

The Canadian fine underscores several broader points relevant to digital asset platforms: the importance of registering where required by law, submitting large transaction reports when thresholds are met, and promptly filing suspicious transaction reports when reasonable grounds exist to suspect criminal activity. Failing to meet these obligations can lead to substantial financial penalties, operational restrictions, and reputational damage, and may trigger further legal and regulatory responses in multiple countries.

For users and observers, the case illustrates the growing global focus on AML compliance across the cryptocurrency sector. Regulators are increasingly demanding that exchanges and related service providers implement robust compliance frameworks—covering customer identification, transaction monitoring, reporting, and cooperation with authorities—to mitigate risks associated with money laundering, terrorist financing, and other illicit uses of digital assets.

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