KuCoin, a prominent cryptocurrency exchange, has pleaded guilty to operating an unlicensed money-transmitting business in the United States.
As part of a settlement with US authorities, KuCoin agreed to pay nearly $300 million and will exit the US market for the next two years. The exchange’s founders, Michael Gan and Eric Tang, have also been forced to resign as part of the deal.
The settlement, announced by the Department of Justice (DOJ) on Jan. 27, requires KuCoin to forfeit $184.5 million and pay an additional $112.9 million fine.
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KuCoin Founders to Forfeit $2.7 Million
KuCoin founders Gan and Tang will forfeit $2.7 million and have agreed to step away from all management and operational roles within KuCoin. The company, officially known as PEKEN Global Limited, entered its guilty plea in a Manhattan federal court.
The charges stem from accusations that KuCoin failed to implement effective Anti-Money Laundering (AML) and Know Your Customer (KYC) programs.
Prosecutors alleged that until July 2023, the exchange did not require customers to provide identifying information. According to the DOJ, KuCoin employees publicly stated on social media that KYC procedures were not mandatory, even in response to U.S.-based customers.
Additionally, KuCoin faced accusations of failing to register with the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury Department responsible for combating financial crimes.
In a Jan. 28 blog post, KuCoin assured users that its operations outside the U.S. remain unaffected and highlighted improvements made to its compliance and security frameworks. The company also announced that its Chief Legal Officer, BC Wong, will assume the role of CEO.
Today marks a significant milestone for KuCoin and the crypto community. I’m proud to share that we’ve reached a settlement with U.S. authorities, providing clarity for our future growth.
This moment is not just about resolving challenges—it’s about looking ahead with renewed… pic.twitter.com/YjVVdVA9s6
— BC Wong (@BC_KuCoin) January 27, 2025
Michael Gan described the settlement as a “favorable outcome,” adding that the resolution provides “much-needed clarity” for KuCoin’s future.
He emphasized that the DOJ dismissed all charges against himself and Eric Tang upon meeting specific conditions, asserting there was no intent to violate U.S. law or engage in fraudulent activities.
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Regulatory Scrutiny of Crypto Firms Continue
The case comes amid increasing regulatory scrutiny in the crypto industry. Earlier this month, rival exchange BitMEX was fined $100 million and placed on two years of unsupervised probation for AML violations.
U.S. regulators reported in October that they have collected over $19 billion from crypto companies in lawsuit settlements, accounting for nearly two-thirds of all such settlements to date.
The SEC has taken a tougher stance against crypto firms in 2024. More specifically, the regulator imposed nearly $4.7 billion in enforcement actions against crypto companies, a 3,018% increase from 2023.
More recently, the SEC achieved a partial victory in its legal battle against Kraken as a federal judge in California dismissed one of the crypto exchange’s central defenses.
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