Crypto Exchange KuCoin To Pay $297m In US Settlement

Major cryptocurrency exchange KuCoin has pleaded guilty to operating an unlicensed money-transmitting business and agreed to pay more than $297 million (£238m) in fines and forfeiture.

Peken Global, one of three entities operating as KuCoin, entered the plea in Manhattan federal court as part of an agreement, according to a statement by prosecutors.

The company is to pay a $113m fine and $184.5m in forfeitures under an order by US District Judge Andrew Carter, the US Attorney’s Office said.

The penalties are the latest resulting from a series of US enforcement actions seeking to bring cryptocurrency firms into line with existing US financial regulations.

Logo of cryptocurrency exchange KuCoin. Image credit: KuCoin
Image credit: KuCoin

Suspicious transactions

The settlement will also see KuCoin exit the US market for at least two years, while two of the company’s founders, Chun Gan, known as Michael, and Ke Tang, known as Eric, will enter two-year deferred prosecution agreements.

Both will forfeit $2.7m and cede any role in KuCoin’s management and operations, the US Justice Department said.

Seychelles-based KuCoin facilitated billions of dollars of suspicious transactions and transmitted potential criminal proceeds, including from darknet markets, malware, ransomware and fraud as a result of an alleged failure to implement effective money-laundering and know-you-customer programmes, prosecutors said.

The company also failed to report suspicious transactions or register with the US Treasury Department’s financial crimes network, FinCEN, they said.

“This resolution signifies a new chapter for KuCoin, one that reaffirms our dedication to compliance, security and innovation,” stated BC Wong, KuCoin’s former chief legal officer who was named as chief executive last week.

“We are focusing on strengthening our global compliance practices and exploring opportunities to reenter the market with the necessary licences.”

‘Favourable outcome’

The charges stemmed from a March 2024 indictment against KuCoin and co-founders Chun Gan and Ke Tang, both Chinese nationals.

Gan in a statement called the settlement a “favourable outcome” and noted it dismisses all charges against himself and Ke Tang upon the satisfaction of certain conditions.

He said the settlement indicates that neither he nor Ke Tang intended to violate US laws.

KuCoin in December 2023 reached a settlement with New York state regulators in which the firm agreed to pay $22m in fines and refunds and blocked users in the state from accessing the service.

Earlier this month Seychelles-based exchange BitMEX was ordered to pay $100m for similarly failing to comply with US anti-money-laundering laws.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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