KuCoin has pleaded guilty to operating an unlicensed money-transmitting business and agreed to pay a $300 million settlement.
As part of the settlement, the exchange’s founders, Eric Tang, and Michael Gen, will forfeit $2.7 million and step down from their management roles. The exchange has also agreed to exit the US market for two years.
KuCoin Fined $300M
KuCoin was charged with defying anti-laundering laws only a few years after settling a similar lawsuit in the state of New York. The settlement was announced on January 27, and includes the forfeiture of $184.5 million and a $112 million fine. The entity, operated by PEKEN Global Ltd. also agreed to exit the US market for two years. KuCoin and its founders were put on trial in March 2024 for conspiring to run an unlicensed money-transmitting business in breach of anti-money laundering laws, including the US Bank Secrecy Act, failing to implement adequate KYC and AML measures. The founders agreed to defer prosecution and forfeit $2.7 million. The United States Justice Department and the Commodity Futures Trading Commission accused the exchange of abetting the laundering of up to $9 billion. KuCoin issued a statement following the settlement, assuring users that its operations in other markets will not be impacted.
“We’re pleased to announce that KuCoin has settled with U.S. authorities, a major step forward in our journey. This milestone brings clarity to our future and strengthens our commitment to innovation, compliance, and delivering value to our 38M+ users worldwide.”
KuCoin settled a similar lawsuit in December 2023, settling $22 million in fines and refunds. It also agreed to cease trading in New York in a separate civil suit where the state Attorney General claimed the exchange failed to register as a securities and commodities broker-dealer and falsely represented itself as a crypto exchange.
KuCoin’s Regulatory Issues
KuCoin has struggled to implement the required anti-money laundering policies, according to US Attorney Danielle R. Sassoon.
“For years, KuCoin avoided implementing required anti-money laundering policies designed to identify criminal actors and prevent illicit transactions.”
US authorities allege KuCoin was used to facilitate billions of dollars worth of suspicious transactions and transmit criminal proceeds, including from darknet markets, ransomware, malware, and fraud schemes. The exchange has also come under regulatory scrutiny in Canada, where the Ontario Securities Commission imposed an embargo on the platform from serving users in the country after it failed to meet regulatory requirements. It was also forced out of the Indian market for failing to meet regulatory requirements.
US Tightens Compliance Rules
US authorities have been stepping up efforts to ensure compliance with regulations. KuCoin is not the only platform under regulatory scrutiny. Seychelles-based BITMEX was also fined $100 million for breaching US anti-money laundering laws after being found in violation of the Bank Secrecy Act, which is responsible for strict identity verification compliance and monitoring of illegal activities.
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Source: https://cryptodaily.co.uk/2025/01/kucoin-founders-resign-as-exchange-exits-us-market-after-300m-settlement