Crypto exchange KuCoin has reached settlement with the US Department of Justice after pleading guilty to charges related to violation of the US anti-money laundering laws.
Specifically, the DOJ had charged KuCoin with operating an unlicensed money transmitter business.
DOJ indicted KuCoin over AML violations
According to US authorities, KuCoin violated AML laws and failed to implement effective know-your-customer programs.
In this case, the exchange opened itself to use for money laundering and terrorist financing.
Other than failing to flag and report suspicious transactions, the exchange did not also register with the Financial Crimes Enforcement Network (FinCEN).
The DOJ stated that between September 2017 and March 2024, when the government indicted KuCoin and its founders, the exchange had offered its services to about 1.5 million users in the US.
KuCoin’s US-based users saw the exchange earn roughly $184.5 million in fees.
US Attorney Danielle R. Sassoon said in a statement:
For years, KuCoin avoided implementing required anti-money laundering policies designed to identify criminal actors and prevent illicit transactions. As a result, KuCoin was used to facilitate billions of dollars’ worth of suspicious transactions and to transmit potentially criminal proceeds, including proceeds from darknet markets and malware, ransomware, and fraud schemes.
KuCoin reaches settlement with US authorities
As a result of the settlement, the crypto exchange will pay a total of $297 million in penalties.
The Seychelles-based crypto company’s settlement with the DOJ includes $184.5 million in criminal forfeiture and $112.9 million criminal fine.
KuCoin co-founders Chun Gan and Ke Tang have also agreed to forfeit $2.7 million each.
The DOJ also said the co-founders had agreed to exit the exchange and will not hold any positions or roles related to KuCoin management and operations.
Peken Global Limited, the company that operates KuCoin out of Seychelles, agreed to exit the US market for at least two years.
The DOJ on its part agreed to drop all charges against Gan and Tang, with these deferred for two years pending the co-founders meeting set conditions.
BC Wong, the chief executive officer of KuCoin commented on the settlement via a press release:
This resolution signifies a new chapter for KuCoin, one that reaffirms our dedication to compliance, security, and innovation.
While we are exiting the US for the present, we are focusing on strengthening our global compliance practices and exploring opportunities to reenter the market with the necessary licenses.
According to Wong, KuCoin will continue to pursue compliance as it champions innovation and support for global adoption of crypto.
KuCoin launched its operations in 2017 and is one of the largest crypto exchanges in the market.
Its settlement with the DOJ follows similar developments for Binance.
The exchange agreed a $4.3 billion settlement with US authorities in November 2023, which also saw Binance founder Changpeng Zhao also agreed to step down as CEO.
Zhao served a four-month prison sentence in the US.
The post KuCoin faces $297 million settlement with DOJ appeared first on Invezz
