Key Takeaways
- The judge imposed a $113 million fine and $184.5 million in forfeitures as part of the plea agreement.
- Officials noted that “exchanges operating without proper controls risk undermining financial systems and enabling criminal misuse.”
Leading crypto exchange KuCoin has pleaded guilty to operating an unlicensed money-transmitting business and agreed to pay nearly $300 million in fines and forfeitures.
The resolution marks the culmination of a federal investigation by the U.S. Department of Justice (DOJ), which accused the Seychelles-based exchange of failing to comply with anti-money laundering (AML) requirements and operating without proper licensing.
On January 27, Peken Global Ltd., one of three entities operating as KuCoin, entered its plea before U.S. District Judge Andrew Carter in Manhattan. The judge imposed a $113 million fine and $184.5 million in forfeitures as part of the plea agreement.
In addition, two of KuCoin’s founders, Chun Gan and Ke Tang, both from China, signed deferred prosecution agreements and agreed to forfeit $2.7 million each. The agreements allow them to avoid criminal convictions if they comply with specified conditions over a defined period.
The case against KuCoin and its founders began in March 2024, when the DOJ indicted the company and its executives on charges of conspiring to operate an unlicensed money-transmitting business and failing to implement essential AML safeguards.
Prosecutors emphasized the importance of such safeguards in preventing illicit financial activities. In a statement, officials noted that “exchanges operating without proper controls risk undermining financial systems and enabling criminal misuse.”
This is not KuCoin’s first regulatory entanglement in the United States. In December 2023, the company settled claims with the New York Attorney General’s office, agreeing to pay $22 million in fines and refunds. As part of the settlement, KuCoin ceased operations in New York after being accused of misrepresenting itself as a licensed exchange and failing to register as a securities and commodities broker-dealer.
KuCoin has also faced scrutiny in other jurisdictions outside the US. In 2022, the Ontario Securities Commission (OSC) banned KuCoin from operating in Canada after the exchange failed to comply with securities regulations. Similarly, in India, KuCoin and other major exchanges faced restrictions for regulatory non-compliance before eventually regaining access to the market after addressing compliance issues.
The KuCoin case is part of a broader crackdown on crypto exchanges by U.S. regulators. Earlier this month, BitMEX, another Seychelles-based cryptocurrency exchange, was ordered to pay a $100 million fine for violating the Bank Secrecy Act, which mandates AML safeguards such as customer identity verification. BitMEX’s executives had also pleaded guilty to related charges in 2022.
