KuCoin has pleaded guilty to operating an unlicensed money-transmitting business and agreed to pay nearly $300 million in a settlement with the US, with its founders also forced to resign from the crypto exchange.
PEKEN Global Limited, operating as KuCoin, entered its guilty plea in a Manhattan federal court as part of a settlement deal, the Department of Justice said on Jan. 27.
The plea includes a forfeiture of $184.5 million and a $112.9 million fine, and KuCoin will exit the US market for two years. The exchange’s founders, Michael Gan and Eric Tang, will also forfeit $2.7 million and “will no longer have any role in KuCoin’s management or operations” in a deferred prosecution agreement.
In March, prosecutors accused KuCoin, Gan and Tang of failing to have effective Anti-Money Laundering and Know Your Customer programs. The Justice Department said that until around July last year, “KuCoin did not require customers to provide any identifying information.”
“KuCoin employees repeatedly stated on public social media sites that KYC was not mandatory on KuCoin, including in response to posts from customers who had identified themselves as being in the US,” it added.
The crypto exchange was also accused of failing to register with the US Department of Treasury’s Financial Crimes Enforcement Network.
KuCoin said in a Jan. 28 blog post that its operations in other markets remain unaffected, and significant strides have been made in strengthening its compliance framework and platform security.
Source: KuCoin
In a Jan. 28 statement, Gan said the settlement was “a favorable outcome,” and KuCoin’s chief legal officer, BC Wong, will be taking over as CEO.
Gan added that the Justice Department dismissed all charges against himself and Tang upon “satisfaction of certain conditions,” and the resolution “provides much-needed clarity and paves a clear path forward” for KuCoin.
Source: BC Wong
“I appreciate the DOJ’s constructive approach in reaching this resolution, which reflects my lack of any intent to violate US law or involvement in money laundering, fraud, or similar criminal actions,” Gan said.
Related: KuCoin introduces new crypto payment system for exchange users
Earlier this month, rival crypto exchange BitMEX was ordered to pay $100 million and hit with two years of unsupervised probation for failing to comply with US Anti-Money Laundering laws.
In October, US regulators said they had collected over $19 billion in lawsuit settlements from crypto companies up to that point, representing almost two-thirds of all settlements to date.
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