KuCoin Agrees to $297M Settlement Over Compliance Failures

KuCoin, one of the world’s largest cryptocurrency exchanges, has reached a settlement with the U.S. government, agreeing to pay $297 million in penalties. The exchange’s parent company, Peken Global Limited, pleaded guilty to operating an unlicensed money-transmitting business. The U.S. Attorney’s Office for the Southern District of New York announced the charges, citing violations of anti-money laundering (AML) regulations.

Compliance Failures and Legal Consequences

According to U.S. Attorney Danielle R. Sassoon, KuCoin failed to implement an effective AML program and did not report suspicious transactions. These shortcomings allegedly allowed illicit funds to move through the platform.

“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,” Sassoon stated. “Today’s guilty plea and penalties show the cost of refusing to follow these laws and allowing unlawful activity to continue.”

Under the settlement, KuCoin will forfeit $184.5 million and pay an additional $112.9 million in fines. The exchange has also agreed to exit the U.S. market for at least two years.

In addition to corporate penalties, two of KuCoin’s founders, Chun Gan and Ke Tang, have agreed to forfeit approximately $2.7 million each. Both individuals will no longer be involved in the company’s management or operations.

KuCoin ranks as the 17th-largest cryptocurrency exchange globally by monthly visits, according to CoinGecko. Despite its significant market presence, the exchange now faces increased regulatory scrutiny, particularly in jurisdictions with strict compliance requirements.

With KuCoin exiting the U.S., the crypto industry continues to face growing enforcement actions from regulators. This case highlights the increasing pressure on exchanges to adhere to AML laws and ensure compliance with financial regulations.