U.S. DOJ settlement forces KuCoin to address AML lapses, paying steep penalties.
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KuCoin pleaded guilty to operating an unlicensed money-transmitting business in a settlement with the U.S. Department of Justice on Jan. 27, agreeing to exit the U.S. market for two years and pay penalties nearing $300 million. The plea addresses allegations the exchange failed to register with the Financial Crimes Enforcement Network, maintain anti-money-laundering safeguards, and report suspicious activities, per the U.S. Attorney’s Office for the Southern District of New York.
Court documents show KuCoin, founded in 2017 and operated by Seychelles-based Peken Global Limited, served approximately 1.5 million U.S. users and earned them about $184.5 million in fees. Prosecutors said the platform allowed billions of dollars worth of suspicious transactions, including potential proceeds from darknet markets, fraud schemes, and other illicit sources. Company founders Chun Gan (Michael) and Ke Tang (Eric), indicted in March 2024, face deferred prosecution and will not manage the exchange during the two years.
The Department of Justice stated that KuCoin did not require users to provide identifying information until August 2023. Employees had publicly described know-your-customer checks as optional, even for U.S.-based users. KuCoin later introduced KYC measures for new registrants, but existing customers could still withdraw or close positions without meeting those standards. Prosecutors also said KuCoin never filed mandatory suspicious activity reports.
KuCoin’s leadership responded to the settlement with optimism about future compliance. Newly appointed Chief Executive Officer BC Wong, referencing the resolution on social media, credited users’ support and highlighted KuCoin’s plans to innovate while ensuring regulatory adherence.
Per the exchange’s blog, KuCoin’s KCS token rose 13.7% following news of the plea agreement, suggesting investor relief and renewed confidence. Bitcoin is up 5% from its local low and trades near $102,700, while Ethereum hovers around $3,203.62.
The plea deal requires KuCoin to forfeit $184.5 million and pay an additional criminal fine of about $112.9 million. Each founder also agreed to surrender $2.7 million in proceeds. Prosecutors underlined that KuCoin’s failures in compliance facilitated large-scale laundering of potentially criminal funds, describing the resolution as a warning for businesses that disregard U.S. financial rules. KuCoin will remain off-limits to U.S. customers for at least two years, and the two founders will not be involved in operations during that period.
Also known as “Akiba,” Liam Wright is a reporter, podcast producer, and Editor-in-Chief at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change.
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KCS performs as the key to the entire KuCoin ecosystem, and it will also be the native asset on KuCoin’s decentralized financial services as well as the governance token of KuCoin Community..
KuCoin is a global cryptocurrency exchange for numerous digital assets and cryptocurrencies that launched in September 2017.
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