KuCoin Pays $297M Penalty for Unlicensed U.S. Operations

Crypto exchange KuCoin has agreed to pay a $297 million penalty to the U.S. government for operating an unlicensed money-transmitting business. The Seychelles-based company, Peken Global Limited, which operates KuCoin, pleaded guilty to the charges, according to a press release from the U.S. Attorney’s Office for the Southern District of New York.

U.S. Attorney Danielle R. Sassoon stated that KuCoin failed to maintain an adequate anti-money laundering (AML) program and failed to report suspicious transactions. As a result, the exchange 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 agreed to criminally forfeit $184.5 million and pay a fine of $112.9 million. The firm will also exit the U.S. market for at least two years. Two of the exchange's founders, Chun Gan and Ke Tang, each agreed to forfeit approximately $2.7 million in funds and will have no role in KuCoin's management or operations going forward.

KuCoin is the 17th-largest crypto exchange in the world in terms of monthly visits, according to data from CoinGecko. The penalty and guilty plea highlight the importance of compliance with U.S. regulations for crypto exchanges operating in the country.