• FINTRAC imposed a C$19.5 million ($14.1M) penalty on KuCoin for failing to register as a foreign money services business and not reporting large crypto transactions.
• KuCoin has appealed the decision to the Federal Court of Canada, arguing that FINTRAC’s decision was incorrect and the fine was excessive.

KuCoin, one of the largest crypto exchanges worldwide, has been given a red flag by the Canadian financial intelligence agency. The regulator, which is officially known as the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), announced this warning on Thursday and shared that the exchange has been penalized with about C$19.5 million, which is equivalent to $14.1 million in U.S. dollars.

FINTRAC’s Regulatory Verdict and KuCoin’s Response

The exchange received this punishment due to their failure to adhere to the Canadian laws designed to fight money laundering and the financing of terrorism. According to FINTRAC, KuCoin’s operating company, Peken Global Ltd., failed to follow important legal requirements while offering its services to Canadian users.

The regulator also shared that the exchange did not register in Canada as a foreign money services business, a step that is mandatory for every firm that intends to operate in the financial transaction sector in the country.

In addition, KuCoin was accused of ignoring rules that require companies to report large cryptocurrency transfers worth over C$10,000. It also failed to submit major reports about transactions that appeared suspicious or unusual, which Canadian law demands as part of efforts to help protect the financial system and fight against illegal activities, especially with cryptocurrency.

Immediately after the news from the financial regulators became public, KuCoin responded and made it clear that it disagrees with FINTRAC’s findings. The company went on to reveal that it had already filed an appeal with the Federal Court of Canada in order to challenge the decision of the regulators.

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In its official statement, KuCoin emphasized that it respects Canada’s legal processes and values regulatory compliance. However, it argued that FINTRAC made a mistake in classifying the exchange as a foreign money services business. The firm also described the size of the penalty as unfair, saying it was too harsh and went beyond what is a reasonable punishment.

KuCoin’s Chief Executive Officer, BC Wong, added further remarks in a public post he shared on his X profile. He explained that the company completely disagrees with FINTRAC not only on the details of the accusations but also on the way the investigation was carried out.

According to Wong, KuCoin is determined to defend its position through the proper legal channels. He also explained that the exchange continues to stand by its promise of being transparent and fully compliant with regulations in every region where it currently operates.

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