Crypto exchange KuCoin has reached a landmark settlement with the US justice system, agreeing to pay a colossal $300 million fine for operating without a license.
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KuCoin capitulates to U.S. justice: a record $300 million fine
On Monday January 27, the parent company PEKEN Global Limited, Kucoin admitted his guilt in Manhattan federal court, agreeing to pay a record $300 million penalty for operating illegally on U.S. soil.
This penalty, among the most severe ever imposed in the crypto industry, comprises two major components: a forfeiture of $184.5 million in illicit gains and an additional fine of $112.9 million.
The Justice Department’s investigation highlighted critical breaches of US financial regulations, including the complete absence of an anti-money laundering scheme. Until summer 2023, KuCoin allowed its users to carry out transactions without identity verification, flouting U.S. KYC (Know Your Customer). This neglect of compliance standards weighed particularly heavily in the court’s decision.
A major upheaval in KuCoin’s governance
The repercussions of this agreement are not limited to financial sanctions. The founders, Michael Gan and Eric Tang forced to resign and forfeit $2.7 million. BC Wong, former general counsel will take up the reins as the company’s new CEO.
The platform will also have to cease operations in the U.S. market for two years, during which time it undertakes to consolidate its compliance framework.
However, in a release, KuCoin claims that its operations in other markets will remain active, in an attempt to reassure its international user base.
This case is part of a wider context of increased regulatory oversight of the crypto sector in the USA. US authorities have already collected more than $19 billion in settlements from crypto companies.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
