Major digital asset exchange KuCoin has admitted to operating without proper licenses and agreed to pay $297.4 million in penalties, marking one of the largest settlements in crypto enforcement history.
KuCoin Pleads Guilty, Agress to Pay Almost $300M
The Seychelles-based exchange operator, Peken Global Ltd, entered a guilty plea in Manhattan federal court for running an unlicensed money transmitting business. The settlement comprises a $112.9 million criminal fine and $184.5 million in forfeiture.
KuCoin's founders, Michael Gan and Eric Tang, have agreed to step away from the company's operations and management. Each will forfeit $2.7 million and enter two-year deferred prosecution agreements.
We’re pleased to announce that KuCoin has reached a settlement with U.S. authorities, a major step forward in our journey. This milestone brings clarity to our future and strengthens our commitment to innovation, compliance, and delivering value to our 38M+ users worldwide.… pic.twitter.com/EVZI1UI4Zc
— KuCoin (@kucoincom) January 27, 2025
The exchange, which serves over 30 million users across 207 countries, faced scrutiny for inadequate anti-money laundering controls and know-your-customer procedures. Prosecutors revealed the platform facilitated billions in suspicious transactions, including potential criminal proceeds from darknet markets, malware, and fraud schemes.
Under new CEO BC Wong, KuCoin must exit the U.S. market for at least two years. The company has expressed commitment to strengthening compliance practices and pursuing necessary licenses for potential market reentry.
"This resolution signifies a new chapter for KuCoin, one that reaffirms our dedication to compliance, security and innovation," Wong commented. “We are focusing on strengthening our global compliance practices and exploring opportunities to reenter the market with the necessary licenses.”
This is another case following the December 2023 agreement, when the exchange—currently ranked eighth globally in trading volumes—agreed to block users from New York and pay a $22 million settlement.
Despite the recent settlement valued in the hundreds of millions, KuCoin's utility token, KCS, is up 10% today (Tuesday).
Why Is KuCoin Surging? KCS Hits Its Highest Levels in a Year
Although news of a substantial settlement might typically trigger a decline in the associated exchange’s token, KuCoin has seen the opposite effect. On Tuesday, January 28, 2025, KCS is trading at $14.6, marking a 10% increase and testing levels not seen since March 2024, nearly a year ago.
This surge has little to do with broader market trends, as Bitcoin remains mostly flat with a 0.71% increase, trading below $103,000, and most altcoins showing minimal movement. KuCoin, however, has demonstrated significant momentum, climbing over 34% since the beginning of the year and entering the top 60 cryptocurrencies by market capitalization.
At the beginning of 2025, KuCoin launched KuCoin Pay, a payment solution tailored for the retail industry to simplify cryptocurrency transactions. This platform allows for seamless, contactless, and cross-border payments, bridging traditional retail systems with the cryptocurrency ecosystem. With its robust infrastructure and a global user base exceeding 37 million, KuCoin seeks to promote the wider adoption of cryptocurrencies in everyday commerce.
This article was written by Damian Chmiel at www.financemagnates.com.
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