KuCoin, one of the largest cryptocurrency exchanges globally, has pleaded guilty to operating an unlicensed money transmitting business. This decision comes with a hefty price tag of over $297 million in fines and forfeiture, according to the U.S. Department of Justice.
The plea was made on January 27, 2025, before U.S. District Judge Andrew Carter in Manhattan. KuCoin, operated by Peken Global Ltd, now faces a 112.9 million criminal fine and a $184.5 million forfeiture. As part of the agreement, the exchange will exit the U.S. market for a minimum of two years.
The founders of KuCoin, Chun Gan (Michael) and Ke Tang (Eric), are also feeling the impact. Each has agreed to a two-year deferred prosecution agreement and will forfeit $2.7 million. Furthermore, they will step away from any management roles within the company.
Prosecutors have accused KuCoin of facilitating billions of dollars in suspicious transactions. The exchange allegedly transmitted criminal proceeds connected to darknet markets, malware, ransomware, and fraud. The core issue stems from KuCoin’s failure to implement effective anti-money laundering (AML) and know-your-customer (KYC) programs.
Additionally, KuCoin did not report suspicious transactions nor was it registered with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), prosecutors stated. This lack of oversight has raised serious concerns about the company’s operations.
Founded in 2017, KuCoin has grown rapidly, boasting more than 30 million registered users across at least 207 countries and territories as of March 2024. Despite the recent legal troubles, the newly appointed CEO, BC Wong, emphasizes a commitment to compliance. “This resolution signifies a new chapter for KuCoin,” Wong stated. He aims to strengthen the company’s compliance practices and explore pathways for reentering the market with the necessary licenses.
In December 2023, KuCoin had already taken steps to address legal challenges by blocking New York users and agreeing to pay $22 million to settle a lawsuit for failing to register.
As the eighth-largest cryptocurrency spot exchange worldwide, KuCoin faces stiff competition from giants like Binance and Coinbase. The road ahead looks challenging as the company works to rebuild its reputation and navigate the complex regulatory landscape.
