FINTRAC Fines KuCoin $19.6M for Anti-Money Laundering Violations

Canadian anti-money laundering regulator FINTRAC has imposed a $19.6 million penalty on cryptocurrency exchange KuCoin.

The platform, operated by Seychelles-based Peken Global Ltd., faces sanctions for three alleged breaches of anti-money laundering requirements. Among them: a failure to disclose 33 suspicious transactions linked to illicit activities, including dark web markets, individuals under criminal suspicion, and companies supplying precursors for synthetic drugs.

FINTRAC reported that it uncovered wallet activity “showing direct or indirect exposure to known high-risk sources such as darknet marketplaces, mixing services, questionable gambling operations, ransomware-related activity, and theft reports.”

The agency classified these alleged violations as “very serious.” Additional findings included KuCoin’s failure to register as a foreign money services business with FINTRAC and failure to report large-value transactions exceeding $10,000.

Through blockchain analytics, FINTRAC identified nearly 3,000 transactions worth more than $10,000 conducted on the platform between June 2021 and May 2024.

KuCoin has filed an appeal with the Federal Court.

In response, the company said it “firmly rejects both the findings and the penalty” imposed. It argued it should not fall under the classification of a foreign money services business and described the fine as “excessive and punitive.”

“We disagree with this ruling on both substantive and procedural grounds and have pursued all legal channels to secure a fair resolution for KuCoin,” CEO BC Wong stated. “We remain committed to transparency and full compliance with applicable regulations.”

Back in 2022, Ontario’s Capital Markets Tribunal sanctioned two other Seychelles-based firms — Mek Global Ltd. and PhoenixFin Pte Ltd. — for trading securities without registration and illegally distributing them. Those firms, which did not take part in the proceedings, were fined $2 million and permanently banned. According to the Ontario Securities Commission, those penalties remain unpaid.