KuCoin Pleads Guilty to Operating Unlicensed Business, Agrees to Pay $300M

Highlights:

• KuCoin pleads guilty to money-transmitting fraud in the U.S.
• KuCoin suspends U.S. operations for two years as part of the deal.
• Founders step down, while KuCoin focuses on better compliance and security.

According to a Bloomberg report, KuCoin, a Seychelles-based crypto exchange, pleaded guilty to U.S. criminal charges for operating an unlicensed money-transmitting business and agreed to pay nearly $300 million in a settlement. PEKEN Global Limited, the entity behind KuCoin, pleaded guilty in a Manhattan federal court as part of a settlement agreement, the Department of Justice (DOJ) announced on January 27.

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KuCoin Hit with Fine and Two-Year U.S. Suspension After Guilty Plea

U.S. District Judge Andrew Carter imposed a $113 million fine and $184.5 million in forfeitures, with KuCoin agreeing to suspend its operations in the US for two years. Founders Michael Gan and Eric Tang will surrender $2.7 million and step down from all management and operational roles at KuCoin as part of a deferred prosecution agreement.

In March, the DOJ charged KuCoin with facilitating up to $4 billion in criminal-linked funds. The trading platform was also accused of violating Anti-Money Laundering (AML) and Know-Your-Customer (KYC) regulations. The Justice Department said that until July last year, KuCoin didn’t ask customers for ID. It also mentioned that KuCoin employees publicly stated KYC wasn’t required, even for U.S. users.

U.S. Attorney Danielle Sassoon said:

“Today’s guilty plea and penalties show the cost of refusing to follow these laws and allowing unlawful activity to continue.”

This guilty plea is one of the prominent concessions many crypto entities make to settle legal disputes with U.S. authorities. Recently, American commission-free trading platform Robinhood Markets paid $45 million to resolve federal securities violations with the Securities and Exchange Commission (SEC).

KuCoin’s Statement on Settlement and Leadership Change

In a January 28 blog post, KuCoin stated that its operations in other markets remain unaffected. The company also highlighted significant progress in enhancing its compliance framework and platform security.

We’re pleased to announce that KuCoin has reached a settlement with U.S. authorities, a major step forward in our journey. This milestone brings clarity to our future and strengthens our commitment to innovation, compliance, and delivering value to our 38M+ users worldwide.… pic.twitter.com/EVZI1UI4Zc

— KuCoin (@kucoincom) January 27, 2025

Gan also described the settlement as “a favorable outcome.” KuCoin’s chief legal officer, BC Wong, will take over as CEO. Gan also mentioned that the Justice Department dropped all charges against him and Tang after meeting certain conditions. He emphasized that the resolution provides “much-needed clarity” and clears a path forward for KuCoin.

KuCoin’s Global Regulatory Challenges

This isn’t KuCoin’s first regulatory issue in the U.S. In March 2023, KuCoin also faced charges in New York for violating state laws on securities and commodities trading. Later that year, KuCoin agreed to pay $22 million in fines as part of a consent order and to halt operations in the state.

Outside the United States, the company also encountered regulatory challenges in other regions, including Canada. In 2022, the Ontario Securities Commission (OSC) prohibited the exchange from serving users in Canada for failing to comply with the country’s securities laws. Last year, India blocked KuCoin and other exchanges like Binance for non-compliance. After months of waiting, financial authorities lifted the ban, allowing KuCoin to legally operate in the country.

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