KuCoin Settles with U.S. Authorities, Agrees to $300M Penalty and Two-Year Market Exit
KuCoin has admitted to running an unlicensed money transmission business and reached a settlement with U.S. authorities on January 27.
The agreement requires the exchange to halt operations in the United States for two years and pay nearly $300 million in penalties. The case, brought by the U.S. Attorney’s Office for the Southern District of New York, alleged that KuCoin failed to register with the Financial Crimes Enforcement Network (FinCEN), neglected anti-money-laundering requirements, and failed to report suspicious transactions.
The exchange, established in 2017 and operated by Seychelles-based Peken Global Limited, reportedly served around 1.5 million U.S. users, generating $184.5 million in fees. Authorities claim KuCoin facilitated billions of dollars in questionable transactions, potentially tied to illicit activities like fraud and darknet marketplaces. The company’s founders, Chun Gan (Michael) and Ke Tang (Eric), were charged in 2024 and have agreed to deferred prosecution, stepping away from the company for the next two years.
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Prosecutors highlighted that KuCoin did not enforce proper identity verification for users until August 2023. Employees had allegedly downplayed the need for such checks, even for U.S.-based users. Although KYC measures were later introduced, existing customers could still withdraw funds without meeting these requirements. KuCoin also failed to file mandatory reports on suspicious activities, a key compliance failure according to the Department of Justice.
In response to the settlement, KuCoin’s new CEO, BC Wong, expressed optimism about improving regulatory compliance and rebuilding trust. On social media, Wong acknowledged user support and emphasized the company’s commitment to innovation and adhering to financial regulations moving forward.
Following the announcement, KuCoin’s native token, KCS, gained 13.7%, signaling investor relief. Bitcoin and Ethereum also saw gains, with Bitcoin trading near $102,700 and Ethereum around $3,203.
The settlement includes the forfeiture of $184.5 million in earnings, a $112.9 million criminal fine, and $2.7 million surrendered by each founder. U.S. prosecutors stressed that KuCoin’s lax compliance enabled large-scale money laundering and warned other businesses against bypassing U.S. financial regulations. For at least two years, KuCoin will be barred from serving U.S. customers, and the founders will remain uninvolved in its operations.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
