Kucoin Settles with DoJ, CFTC for $300M; Founders Barred

Crypto exchange Kucoin and its founders have reached a significant settlement with the U.S. Department of Justice (DoJ), marking the end of a legal battle that began last year. The exchange and its founders, Chun Gan and Ke Tang, pleaded guilty to violating money transmission and Bank Secrecy Act laws in the United States.

The DoJ charged Kucoin and its founders with conspiring to operate an unlicensed money transmitting business and conspiring to violate the Bank Secrecy Act by failing to maintain an adequate anti-money laundering (AML) program. The exchange was accused of being used for money laundering and terrorist financing, with billions in suspicious transactions potentially involving darknet markets and malware.

The settlement has cost the parent company of Kucoin, PEKEN, a substantial amount. The company has agreed to pay a criminal fine of nearly $112.9 million and forfeit $184.5 million. Additionally, the company will be required to close its business in the United States for at least two years. The founders, Gan and Tang, will forfeit $2.7 million and are barred from holding any operational or managerial position at the exchange.

In addition to the DoJ's announcement, the Commodity Futures Trading Commission (CFTC) also released a press statement charging the exchange with operating an illegal derivatives exchange in the United States. The CFTC alleged that Kucoin accepted orders for commodity futures, swaps, and other commodity transactions without registering with the commission. The CFTC seeks disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.