TLDR
- KuCoin has filed an appeal against a $14.5M fine imposed by Canadian regulators over alleged anti-money laundering violations.
- The fine was issued by FINTRAC for failing to report nearly 3,000 large cryptocurrency transactions between 2021 and 2024.
- KuCoin disagrees with both the findings and the severity of the penalty, calling it excessive and punitive in nature.
- The company has faced previous legal challenges, including a 2023 penalty by the Ontario Securities Commission for securities law violations.
- KuCoin remains committed to improving its compliance efforts, despite its ongoing legal battles with regulators in multiple countries.
KuCoin has appealed a significant fine imposed by Canadian regulators for alleged anti-money laundering (AML) violations. The Canadian Financial Transactions and Reports Analysis Centre (FINTRAC) fined the crypto exchange $19 million CAD ($14 million USD) for failing to meet mandatory reporting requirements. The fine, issued between 2021 and 2024, follows accusations that KuCoin neglected to flag suspicious transactions.
Regulatory Allegations Against KuCoin
FINTRAC claims that KuCoin failed to report nearly 3,000 large cryptocurrency transactions. According to the regulator, these transactions could have been linked to money laundering or terrorist financing. Furthermore, the agency identified 33 separate instances where KuCoin did not flag suspicious activities.
The Canadian regulator argued that KuCoin violated financial reporting obligations, which are crucial for detecting financial crimes.
“The violations were severe and undermined efforts to maintain a safe financial system,” said FINTRAC officials.
The regulator emphasized that such lapses can potentially harm national security.
KuCoin Appeals $14.5M Fine in Canada
KuCoin disagrees with the findings and severity of the penalty. The company confirmed it had filed an appeal with the Federal Court of Canada.
“KuCoin respects the decision-making process but disagrees with the conclusion that it operates as a Foreign Money Services Business in Canada,” stated the company.
The exchange also criticized the fine, calling it “excessive and punitive.” KuCoin emphasized that it has worked to improve regulatory compliance and transparency and stressed its commitment to better aligning with Canadian laws and regulations.
This legal action marks another significant challenge for KuCoin. In 2023, the Ontario Securities Commission (OSC) penalized the platform for violations of Canadian securities laws. Earlier this year, KuCoin settled with the U.S. Department of Justice (DOJ), agreeing to pay nearly $300 million and cease operating in the U.S.
Despite these setbacks, KuCoin remains committed to enhancing its compliance efforts. The platform has consistently resisted regulatory penalties it deems excessive or unfounded. Through ongoing appeals, KuCoin seeks to reduce the fine and mitigate potential damages to its reputation.
