Crypto exchange KuCoin has admitted to operating an unlicensed money-transmitting business and will pay nearly $300 million in fines and forfeitures as part of a settlement with the US government. The deal also requires the resignation of KuCoin’s founders and a temporary exit from the US market.
Details of the Settlement
On January 27, KuCoin’s parent company, Peken Global Limited, entered a guilty plea in a Manhattan federal court. According to the Department of Justice, the settlement includes:
- Forfeiture: $184.5 million
- Fines: $112.9 million
- Founders’ Forfeiture: Michael Gan and Eric Tang will forfeit $2.7 million and resign from their roles in KuCoin’s management and operations.
Under the agreement, KuCoin will leave the US market for two years. The founders will not face criminal charges as long as they meet the terms of the deferred prosecution agreement.
Allegations Against KuCoin
Prosecutors alleged that KuCoin failed to implement proper Anti-Money Laundering (AML) and Know Your Customer (KYC) programs, even publicly stating that KYC was not mandatory for its users. Until July 2023, the platform reportedly allowed customers to trade without providing identification, including users based in the US.
KuCoin was also accused of failing to register with the Financial Crimes Enforcement Network (FinCEN) under the US Department of Treasury.
KuCoin’s Response
In a January 28 blog post, KuCoin assured customers that its operations outside the US remain unaffected. The company emphasized improvements in its compliance and platform security.
Michael Gan, KuCoin’s co-founder, called the settlement a “favorable outcome,” adding that it offers clarity and sets the stage for KuCoin’s future. Gan also stated that the Justice Department dismissed all charges against him and co-founder Eric Tang after meeting specific conditions.
BC Wong, KuCoin’s Chief Legal Officer, will now take over as CEO.
Broader Industry Impact
The settlement is the latest in a series of enforcement actions targeting crypto companies. Earlier this month, rival exchange BitMEX was fined $100 million and placed on unsupervised probation for AML violations.
In October 2024, US regulators announced that they had collected over $19 billion in settlements from cryptocurrency firms, representing nearly two-thirds of all penalties levied on the industry to date.
