On Monday, KuCoin, one of the world's largest cryptocurrency exchanges, pleaded guilty to running an unlicensed money transmitting business and agreed to pay over $297 million in fines and forfeiture as reported by the U.S. Department of Justice. Peken Global Ltd, operating as KuCoin, entered the plea before U.S. District Judge Andrew Carter in Manhattan.
The plea deal encompasses a $112.9 million criminal fine, a $184.5 million forfeiture, and mandates that KuCoin withdraw from the U.S. market for at least two years. The founders, Chun Gan (Michael) and Ke Tang (Eric), agreed to two-year deferred prosecution agreements, forfeiting $2.7 million each and relinquishing any involvement in KuCoin's management and operations.
Prosecutors stated that the KuCoin exchange, based in Seychelles, facilitated billions in suspicious transactions including potential criminal proceeds from darknet markets, ransomware, and fraud due to inadequate anti-money laundering measures and know-your-customer programs.
Moreover, KuCoin neglected to report suspicious transactions or register with the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). KuCoin, established in 2017, had over 30 million registered users across 207 countries and territories as of March 2024.
BC Wong, recently appointed as KuCoin's chief executive, emphasized the company's commitment to compliance, security, and innovation, expressing plans to strengthen global compliance practices for a potential market reentry with proper licenses.
Alexander Wilson, Gan's lawyer, noted that the resolution highlighted his client’s lack of intent to violate U.S. laws regarding money laundering and fraud. However, David Meister, Tang's lawyer, chose not to comment.
In a separate event in December 2023, KuCoin blocked New York users and settled a lawsuit by paying $22 million. Ranked as the world's eighth-largest cryptocurrency spot exchange, KuCoin operates based on factors such as traffic, liquidity, and trading volumes, according to data from CoinMarketCap, with Binance and Coinbase ranked higher among exchanges.