KuCoin Pays $300M Fine, Exits US for Two Years

KuCoin, a China-based cryptocurrency exchange, has agreed to pay a nearly $300 million fine and exit the U.S. market for at least two years after pleading guilty to operating an unlicensed money transmitting business. The U.S. Attorney's Office for the Southern District of New York announced the settlement on Tuesday.

KuCoin was charged with failing to implement required anti-money laundering policies, which allowed the exchange to facilitate billions of dollars in suspicious transactions and transmit potentially criminal proceeds, including those from darknet markets, malware, ransomware, and fraud schemes. The exchange served approximately 1.5 million registered users in the U.S. and earned at least $184.5 million in fees from those users.

As part of the guilty plea, KuCoin's founders, Chun "Michael" Gan and Ke "Eric" Tang, have agreed to step down from the company. Gan, who served as the exchange's CEO, stated that he was stepping down to ensure KuCoin's continued success and had no intent to violate any U.S. or international laws.

The exchange's token, KCS, saw a 10% increase on the day of the announcement, although trading volumes were relatively low.

KuCoin's guilty plea and the subsequent penalties highlight the importance of adhering to anti-money laundering regulations and implementing robust know-your-customer procedures. The case serves as a reminder for cryptocurrency exchanges to prioritize compliance with relevant laws and regulations to prevent illegal activities and protect both consumers and the broader financial system.