KuCoin Pleads Guilty to Unlicensed Money Transmission
In a significant development, KuCoin, a prominent cryptocurrency exchange, has officially pled guilty to one count of operating an unlicensed money transmitting business. The announcement was made by the United States Attorney’s Office for the Southern District of New York, revealing that the exchange will pay a substantial penalty of $297 million.
U.S. Attorney Danielle R. Sassoon highlighted the gravity of the situation, stating, “KuCoin avoided implementing required anti-money laundering policies designed to identify criminal actors and prevent illicit transactions.” The statement further emphasized that KuCoin was implicated in facilitating billions of dollars in suspicious transactions, including the transmission of potentially criminal proceeds linked to darknet markets, malware, ransomware, and various fraud schemes.
As part of its guilty plea, KuCoin has agreed to withdraw from the U.S. market for a minimum of two years. Additionally, the exchange’s founders, Chun “Michael” Gan and Ke “Eric” Tang, will also be stepping down from their roles within the company. The exchange has reportedly served approximately 1.5 million registered users located in the U.S. and generated around $184.5 million in fees from these users.
The release from the U.S. Attorney’s Office noted that KuCoin employees actively promoted the absence of a know-your-customer (KYC) program. It was only in August 2023 that KuCoin introduced a KYC process; however, this policy was not applied retroactively to existing customers. In a further development, Gan and Tang have agreed to forfeit approximately $2.7 million in funds that were accrued as a result of KuCoin’s operations within the U.S. market.
In a press release, Gan expressed his commitment to ensuring the exchange’s ongoing success, stating that he had no intention of violating any U.S. or international laws. Interestingly, despite the legal challenges, KuCoin’s exchange token, KCS, has seen a notable increase, rising by 10% on the day, according to data from CoinGecko, although it is important to note that the token remains thinly traded.
