KuCoin has pleaded guilty to violating US regulations by operating an unlicensed money transfer business. The founders, who took a guilty plea, resigned and agreed to pay almost $300 million in fines and forfeitures in an active case since 2024.
KuCoin was charged with defying anti-laundering laws only a few years after settling a similar civil law in the state of New York. The Seychelles-based Peken Global Ltd., one of the three entities operating as KuCoin, answered to charges on Monday before US District Judge Andrew Carter in Manhattan.
The judge, in the ruling, fined it about $113 million and forfeited $184.5 million.
The exchange and its two founders, Chun Gan, and Ke Tang, were put on trial in March 2024 for plotting to run an unlicensed money-transmitting business in breach of an anti-money laundering program. The two founders then agreed to defer prosecution, each forfeiting about $2.7 million.
In December 2023, the exchange platform settled a $22 million fine and refunds in New York; it further agreed to end trading in New York in a civil suit where the state attorney general claimed KuCoin failed to register as a securities and commodities broker-dealer and falsely represented itself as a crypto exchange.
KuCoin has struggled with regulatory compliance
US Attorney Danielle R. Sassoon said, “For years, KuCoin avoided implementing required anti-money laundering policies designed to identify criminal actors and prevent illicit transactions.”
As a result, KuCoin was used to facilitate billions of dollars worth of suspicious transactions and to transmit potentially criminal proceeds, including proceeds from darknet markets and malware, ransomware, and fraud schemes.
KuCoin has been struggling with regulatory compliance in different territories and jurisdictions. Away from the United States, the company faced regulatory challenges in Canada. In 2022, the Ontario Securities Commission imposed an embargo on KuCoin from serving users in the country because they didn’t meet the regulatory threshold to operate there.
In addition to Canada, KuCoin has also faced regulatory challenges in India. The firm was part of several exchanges that were sent out of the Indian market due to compliance issues.
United States tightens compliance rules in crypto
The United States authorities have stepped up their efforts to ensure crypto players comply with regulations. Kucoin isn’t the only player facing regulatory sanctions for failing to adhere to set standards.
Coincidentally, another Seychelles-based exchange, BITMEX, was also used as an example to lawbreakers. The firm was fined $100 million for breaching the US anti-money laundering laws. The platform was found guilty of violating the Bank Secrecy Act, which is responsible for strict identity verification compliance and monitoring illicit financial activities.
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