KuCoin Fined $297M for Operating Unlicensed Crypto Business in the U.S.

KuCoin, one of the largest cryptocurrency exchanges globally, pleaded guilty to operating an unlicensed money transmitting business and agreed to pay over $297 million in fines and forfeiture, the U.S. Department of Justice announced.

Peken Global Ltd., KuCoin’s operator, admitted guilt in a Manhattan federal court, agreeing to a $112.9 million criminal fine and $184.5 million forfeiture. The settlement requires KuCoin to exit the U.S. market for at least two years.

Two founders, Chun Gan (Michael) and Ke Tang (Eric), also entered deferred prosecution agreements, forfeiting $2.7 million each and stepping down from KuCoin’s management and operations.

Prosecutors revealed that Seychelles-based KuCoin processed billions in suspicious transactions, including potential proceeds from darknet markets, ransomware, and fraud. The exchange was accused of inadequate anti-money laundering (AML) and know-your-customer (KYC) measures, failing to register with the Financial Crimes Enforcement Network (FinCEN) or report suspicious activities.

Established in 2017, KuCoin reportedly served over 30 million users across 207 countries by March 2024.

BC Wong, KuCoin’s newly appointed CEO, stated the company is committed to improving compliance and security while exploring avenues for reentry into the U.S. market with proper licensing.

In December 2023, KuCoin settled a $22 million lawsuit with New York over similar allegations.

According to CoinMarketCap, KuCoin ranks as the eighth-largest cryptocurrency spot exchange, following leaders like Binance and Coinbase.

This case underscores the growing regulatory scrutiny on crypto exchanges and the necessity for robust compliance measures in the industry.