KuCoin Slapped with $14M Fine by Canada’s FINTRAC for Major AML Failures

Canadian regulators just dropped the hammer on one of crypto's biggest exchanges.

FINTRAC—Canada's financial intelligence unit—hit KuCoin with a staggering $14 million penalty for systematic anti-money laundering violations. The exchange failed to implement basic compliance protocols while operating in the Canadian market.

What Actually Went Wrong

KuCoin skipped fundamental KYC checks, didn't register as a money services business, and ignored transaction reporting requirements. Regulators found gaping holes in their compliance framework—the kind of oversight that makes traditional bankers smirk about crypto's 'immaturity'.

The Compliance Wake-Up Call

This isn't just paperwork—it's a signal that global regulators are done playing nice. Exchanges can't operate in regulatory gray areas forever. The fine represents one of the largest AML penalties against a crypto platform in North America this year.

Yet somehow, the crypto space keeps treating compliance like an optional upgrade rather than table stakes. Maybe that's why traditional finance still views digital assets as the wild west—even while pouring billions into the sector.

Why FINTRAC fined KuCoin?

Using blockchain analysis, FINTRAC found that the exchange also failed to report nearly 3,000 large VIRTUAL currency transactions of $10,000 or more between June 2021 and May 2024. Additionally, it did not submit 33 suspicious transaction reports, despite clear indicators of potential criminal or terrorist activity.

Some of these transactions involved exposure to darknet marketplaces, illegal digital platforms, or companies flagged by U.S. authorities for distributing materials used in synthetic drug production. 

FINTRAC said failing to report such transactions can prevent authorities from gathering actionable financial intelligence, which is critical to protecting Canada’s financial system and public safety.

Sarah Paquet, FINTRAC’s Director and CEO, said the penalties are meant to protect Canadians and ensure businesses follow the rules. “Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime is in place to protect the safety of Canadians and the security of Canada’s economy,” she said.

KuCoin has appealed the fine in federal court, arguing that it does not meet the definition of a Canadian money services business and therefore should not have had to register with FINTRAC.

This is not KuCoin’s first run-in with Canadian regulators. In 2022, the Ontario Securities Commission fined both Bybit and KuCoin for allowing Ontario residents to trade unregistered securities. Bybit cooperated and paid a $2.5 million fine, while KuCoin was fined $2 million and faced additional investigation costs.

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