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Crypto Reporter
Shalini Nagarajan
Crypto Reporter
Shalini Nagarajan
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Crypto exchange KuCoin on Monday pleaded guilty to operating an unlicensed money transmitting business and agreed to pay nearly $300m in fines and forfeitures. Peken Global, the company behind KuCoin, presented its guilty plea before US District Judge Andrew Carter in Manhattan.
The plea agreement requires KuCoin to pay a $112.9m criminal fine and forfeit $184.5m.
Furthermore, it mandates that KuCoin leave the US market for a minimum of two years.
Additionally, Chun Gan (“Michael”) and Ke Tang (“Eric”), two of KuCoin’s founders indicted with Peken in March 2024, must step down from their management and operational roles at the company.
Gan and Tang have also agreed to surrender around $2.7 million each, representing funds they earned from KuCoin’s US operations.
DOJ Accuses KuCoin of Violating US AML Laws and Facilitating Billions in Suspicious Transactions
The Department of Justice (DOJ) accused KuCoin of deliberately violating US anti-money laundering laws. The company failed to implement adequate anti-money laundering (AML) and know-your-customer (KYC) programs, which are designed to prevent money laundering and terrorist financing, it said. Moreover, KuCoin did not report suspicious transactions and failed to register with the Financial Crimes Enforcement Network, it added.
Prosecutors revealed that Seychelles-based KuCoin knowingly facilitated billions of dollars in suspicious transactions, including transmitting potential criminal proceeds from activities such as darknet markets, malware, ransomware and fraud.
In Dec. 2023, KuCoin settled claims by the New York state attorney general by agreeing to pay $22m in fines and refunds. As part of the settlement, the company also pledged to cease trading in New York after being accused of operating without proper registration as a securities and commodities broker-dealer and falsely promoting itself as a crypto exchange.
Founded in 2017, KuCoin had reportedly gained over 30m registered users across at least 207 countries and territories by March 2024, according to court filings.
BitMEX Also Hit with $100M Fine for Ignoring US AML Laws
Earlier this month, a Manhattan federal judge similarly imposed a $100m fine on BitMEX, ruling that the exchange had violated the Bank Secrecy Act by “willfully failing” to implement US anti-money laundering (AML) measures. The Justice Department stated that the company disregarded AML laws in an effort to increase its revenue.
The cases against KuCoin and BitMEX represent some of the final outcomes of the Justice Department’s extensive crackdown on crypto exchanges during Joe Biden’s presidency. However, with the recent inauguration of President Donald Trump, who has pledged to reduce government oversight of the crypto market, these actions mark the close of a significant chapter in regulatory enforcement.
