The cryptocurrency exchange KuCoin admitted wrongdoing by receiving US licensing case penalties totaling $300 million through fines and asset forfeitures.
The founders of the KuCoin trading platform, Chun Gan and Ke Tang, abandoned their leadership positions after accepting felony charges. This 2024 case showcased the regulatory difficulties that the Seychelles-based platform has experienced.
Founders face charges and agree to forfeitures
KuCoin faces charges for operating an unlicensed platform while breaking anti-money laundering regulations. In March 2024, the exchange and its founders were accused of running an unlicensed money-transmitting business. KuCoin worked with law enforcement authorities on the case resolution, resulting in the founders’ agreement to surrender $2.7 million each to the authorities. US District Judge Andrew Carter in Manhattan handed down a verdict in which KuCoin faced $113 million in fines and was required to surrender $184.5 million throughout his ruling.
KuCoin has faced previous battles regarding regulatory compliance. The December 2023 agreement saw the company end its operations in New York while paying $22 million in civil lawsuit settlement fines. The New York authorities accused the platform of conducting unregistered operations and false advertising about serving as an official cryptocurrency exchange.
Regulatory compliance issues persist
The exchange KuCoin has fought repeatedly against regulatory compliance standards throughout different regions. US Attorney Danielle R. Sassoon pointed out that the exchange lacked essential AML tools to prevent illegal operations. The platform’s lack of suspicious transaction detection capability resulted in billions of dollars moving through platforms linked to criminal activities, including ransomware networks, darknet markets, and fraud networks.
Outside the United States, the company has struggled with multiple compliance incidents. The Ontario Securities Commission in Canada issued a ban preventing KuCoin from operating in 2022 because it did not meet Canadian regulatory requirements. When faced with administrative oversight, KuCoin followed the Indian market exit.
Growing pressure on Crypto platforms
The recent KuCoin case demonstrates how regulators in the United States step up their efforts to ensure cryptocurrency platforms follow AML regulations. Exchanges now face intensified regulatory scrutiny because they do not comply with AML alongside other financial rules.
The Seychelles-based exchange BitMEX received identical regulatory sanctions previously when it paid $100 million to resolve Bank Secrecy Act compliance violations. The incident with KuCoin demonstrates how regulators worldwide step up their monitoring of cryptocurrency platforms while putting pressure on exchanges to meet legal compliance requirements.