- Kucoin and its founders pay nearly $300 million to settle with the US Department of Justice
- The exchange will also close business for at least 2 years as a result of not complying with the laws
The legal case between crypto-exchange Kucoin and the United States Department of Justice comes to an end. The exchange and its founders have reached a settlement with the regulator, as per an announcement made today. Both entities have also pleaded guilty to violating money transmission and Bank Secrecy Act laws in the United States.
The charges were brought against the crypto exchange and its founders Chun Gan and Ke Tang by the Department of Justice of the Southern District of New York last year in March.
The press release on the same had read,
“conspiring to operate an unlicensed money transmitting business and conspiring to violate the Bank Secrecy Act by willfully failing to maintain an adequate anti-money laundering (“AML”) program designed to prevent KuCoin from being used for money laundering and terrorist financing”
Kucoin’s bail-out costs millions of dollars
Notably, the case settlement has cost the parent company of Kucoin – PEKEN – $297 million. Out of the $297 million, $184.5 million was ‘criminally forfeited’, while nearly $112.9 million was noted to be a criminal fine.
Moreover, the company will have to close business in the country for at least two years. As for the founders, they would be forfeiting $2.7 million, which they received as a result of Kucoin’s operations in the United States. They are also barred from holding any operational or managerial position at the exchange. The latest announcement read,
“KuCoin failed to implement an adequate KYC program. Indeed, until at least July 2023, KuCoin did not require customers to provide any identifying information (…) KuCoin was used to transmit billions in suspicious transactions and potentially criminal proceeds, including proceeds from darknet markets and malware”
Notably, along with the announcement made by the DoJ department, the Commodity Futures Trading Commission (CFTC) also released a press announcement on charges against the exchange. The CFTC has claimed that Kucoin operated illegal derivatives exchange in the United States.
It detailed that the crypto exchange had accepted orders for commodity futures, swaps, and other commodity transactions without registering with the commission. The commission further said,
“In its continuing litigation against KuCoin, the CFTC seeks disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations, as charged.“
