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Crypto exchange KuCoin on Monday admitted to operating an unlicensed money transmitting business and agreed to pay nearly $300 million in penalties and forfeitures. Peken International, the company behind KuCoin, made its guilty plea before US District Judge Andrew Carter in Manhattan.
The plea agreement requires KuCoin to pay a $112.9 million criminal fine and forfeit $184.5 million.
Additionally, it stipulates that KuCoin must exit the US market for a minimum of two years.
Furthermore, Chun Gan (“Michael”) and Ke Tang (“Eric”), two of KuCoin’s founders indicted alongside Peken in March 2024, are required to resign from their management and operational positions within the company.
Gan and Tang have also consented to forfeit approximately $2.7 million each, reflecting earnings derived from KuCoin’s US operations.
We’re pleased to announce that KuCoin has reached a settlement with U.S. authorities, a significant step forward in our journey. This milestone provides clarity for our future and reinforces our commitment to innovation, compliance, and delivering value to our 38M+ customers globally.… pic.twitter.com/EVZI1UI4Zc
— KuCoin (@kucoincom) January 27, 2025
DOJ Accuses KuCoin of Breaching US AML Regulations and Enabling Billions in Questionable Transactions
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The Department of Justice (DOJ) accused KuCoin of deliberately breaching US anti-money laundering regulations. The company failed to implement sufficient anti-money laundering (AML) and know-your-customer (KYC) protocols, which are intended to prevent money laundering and terrorist financing, it stated. Moreover, KuCoin did not report suspicious transactions and failed to register with the Financial Crimes Enforcement Network, it added.
Prosecutors disclosed that Seychelles-based KuCoin knowingly facilitated billions of dollars in questionable transactions, including transmitting potential illicit proceeds from activities such as darknet markets, malware, ransomware, and fraud.
In December 2023, KuCoin resolved claims from the New York state attorney general by agreeing to pay $22 million in fines and refunds. As part of the settlement, the company also committed to ceasing trading in New York after being accused of operating without proper registration as a securities and commodities broker-dealer and misrepresenting itself as a crypto exchange.
Founded in 2017, KuCoin reportedly had over 30 million registered users across at least 207 countries and territories by March 2024, according to court documents.
BitMEX Also Fined $100M for Neglecting US AML Regulations
Earlier this month, a federal judge in Manhattan similarly imposed a $100 million fine on BitMEX, determining that the exchange had violated the Bank Secrecy Act by “willfully failing” to implement US anti-money laundering (AML) measures. The Justice Department stated that the company ignored AML regulations to boost its profits.
The cases against KuCoin and BitMEX represent some of the final outcomes of the Justice Department’s extensive crackdown on crypto exchanges during Joe Biden’s presidency. However, with the recent inauguration of President Donald Trump, who has promised to reduce government oversight of the crypto market, these actions signify the conclusion of a significant chapter in regulatory enforcement.
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