Cryptocurrency Exchange KuCoin has acknowledged operating an unauthorized money-transmitting business in the United States and will pay almost $300 million in penalties and forfeitures. This deal resolves accusations made by the United States Department of Justice, which also necessitated the resignation of KuCoin’s founders and a temporary suspension of the company’s operations in the US.
The settlement, announced on January 27, includes a $184.5 million forfeiture and a $112.9 million punishment. KuCoin will leave the United States market for at least two years. Michael Gan and Eric Tang, the company’s founders, will stand down and forfeit $2.7 million as part of a deferred prosecution arrangement.
The Justice Department cited KuCoin’s failure to adopt strong anti-money laundering (AML) and know-your-customer (KYC) standards, allowing the platform to facilitate criminal transactions. KuCoin reportedly did not demand customer identification until mid-2023, which its workers publicly admitted
The Financial Crimes Enforcement Network has accused the exchange of operating without the necessary registration. Despite this, KuCoin informed users in a January 28 blog post that its global operations will remain unaffected. The corporation underlined recent advancements in compliance and security protocols.
In a statement, Michael Gan described the settlement as a “favorable outcome,” thanking the Justice Department for its cooperative approach. He noted that the agreement gives KuCoin clarity and a route ahead while dismissing claims of intent to violate US laws or facilitate criminal activity.
This legal action comes after broader regulatory examination of the cryptocurrency business, with US authorities collecting large settlements from numerous entities. The KuCoin case demonstrates the crypto industry’s growing regulatory focus on compliance and transparency.
