KuCoin Admits U.S. Money Laundering, Pays $297M Fine

KuCoin, a China-based cryptocurrency exchange, has pleaded guilty to violating U.S. regulations on money laundering and know-your-customer procedures. The company admitted to one charge of "running an unlicensed money transmitting business" and will be required to withdraw from the U.S. market for at least two years and pay a fine of $297 million.

According to the official statement from the U.S. Attorney’s Office, KuCoin avoided implementing standard anti-money laundering policies for years, which would have identified criminal actors and prevented illegal transactions. The company processed billions of dollars in suspicious transactions and transmitted potentially ill-gotten gains, including those from darknet markets, malware, ransomware, and fraud schemes.

KuCoin's founders, Chun Gan and Ke Tang, have stepped down from their positions. Gan, who went by the moniker Michael, announced his departure as part of the agreement and will be succeeded by BC Wong. The company's exchange token, KCS, is up 10% on the day, according to CoinGecko data, although the token is thinly traded.

The U.S. Attorney for the Southern District of New York, Danielle Sassoon, stated that KuCoin's actions showed the cost of refusing to follow the law and allowing unlawful activity to continue. The company had not required know-your-customer (KYC) procedures from its customers until August 2023 and had not registered with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

KuCoin served approximately 1.5 million registered users in the U.S. and earned at least $184.5 million in fees from those users. The company's employees openly promoted the exchange's lack of a KYC program. Gan and Tang have agreed to forfeit approximately $2.7 million in funds generated from KuCoin's operations in the U.S.