KuCoin, one of the largest cryptocurrency exchanges worldwide, admitted in court to operating an unlicensed money transmitting business in the United States. The guilty plea, entered on Monday before U.S. District Judge Andrew Carter in Manhattan, brings hefty financial penalties and a temporary suspension from operating in the U.S. market.
As part of the plea agreement, KuCoin will pay a $112.9 million criminal fine and forfeit $184.5 million. Additionally, the exchange will withdraw from the U.S. market for at least two years.
Founders Agree to Penalties
KuCoin founders, Chun Gan, also known as Michael, and Ke Tang, known as Eric, have agreed to step away from their roles in managing the company. Both founders will enter into two-year deferred prosecution agreements, forfeit $2.7 million each, and play no further role in KuCoin’s operations.
Accusations of Facilitating Suspicious Transactions
The U.S. Department of Justice accused KuCoin of allowing billions of dollars in suspicious transactions to flow through its platform. These transactions allegedly included proceeds from illicit activities such as darknet markets, malware, ransomware, and fraud.
The exchange faced criticism for its lack of effective anti-money laundering (AML) and know-your-customer (KYC) protocols, which left it vulnerable to misuse by criminal actors. Prosecutors also highlighted KuCoin’s failure to report suspicious activity and register with the Financial Crimes Enforcement Network (FinCEN).
KuCoin’s Widespread Reach
Since its founding in 2017, KuCoin has grown to serve over 30 million registered users across 207 countries and territories. However, this global reach did not shield the company from U.S. regulatory enforcement.
KuCoin’s Commitment to Compliance
BC Wong, KuCoin’s newly appointed CEO and former chief legal officer, addressed the resolution in a statement. Wong emphasized that the settlement marks a turning point for the company, reinforcing its commitment to compliance and innovation.
“This resolution signifies a new chapter for KuCoin, one that reaffirms our dedication to compliance, security, and innovation,” Wong said. He added that the company would focus on strengthening its global compliance framework and work toward securing the necessary licenses to reenter the U.S. market in the future.
Defense Attorneys Respond to Plea Agreement
Alexander Wilson, the attorney representing Chun Gan, stated that the agreement reflects his client’s lack of intent to violate U.S. laws or engage in money laundering or other criminal activities.
David Meister, the attorney representing Ke Tang, declined to provide any additional comments on the case.
