- KuCoin agrees to a $300M settlement for unlicensed operations in the US and halts activities for two years.
- KuCoin founders step down and forfeit $2.7M as part of a deferred prosecution agreement.
- KuCoin faces global regulatory challenges but continues operations outside the US after compliance updates.
KuCoin, a Seychelles-based cryptocurrency exchange, has pleaded guilty to operating an unlicensed money-transmitting business in the United States. The deal, which was announced on January 27 by the Department of Justice, includes more than $300 million in penalties. The $113 million fine and $184.5 million in forfeitures make up this figure.
Management Changes and U.S. Operations Halt
KuCoin agreed to suspend its U.S. operations for two years as part of the settlement. Michael Gan and Eric Tang will step down from all operational and management roles. They also will give up $2.7 million as part of a deferred prosecution agreement.
The DOJ charged the company in March 2023 with facilitating up to $4 billion in criminal-linked funds. It also accused the platform of failing to comply with Anti-Money Laundering and Know-Your-Customer regulations. KuCoin is alleged to have allowed transactions without requiring customer identification which is a violation of U.S. laws.
Broader Compliance Issues
This case is not KuCoin’s first regulatory challenge in the U.S. In March 2023, the platform faced similar charges in New York for violating state laws related to securities and commodities trading. It later paid $22 million in fines and ceased operations in the state.
KuCoin has also faced legal issues outside the U.S. In Canada, the Ontario Securities Commission barred KuCoin in 2022 for non-compliance with securities laws. In India, authorities blocked the exchange for several months before lifting the ban after compliance measures were implemented.
Leadership Transition and Compliance Enhancements
Following the settlement, KuCoin’s chief legal officer, BC Wong, will take over as CEO. KuCoin emphasized that the resolution allows the company to focus on improving its compliance framework and platform security. The exchange assured users that its operations in other markets remain unaffected.
KuCoin’s settlement reflects broader enforcement trends in the crypto industry. Recently, Robinhood Markets paid $45 million to resolve federal securities violations. These developments highlight increased scrutiny of compliance practices in the sector.
