• KuCoin pleads guilty to operating an unlicensed money-transmitting business in the U.S. and agrees to pay $297 million in penalties.
  • The exchange failed to implement anti-money laundering policies, facilitating billions in suspicious transactions and criminal proceeds.
  • KuCoin will exit the U.S. market for two years, and its founders, Chun "Michael" Gan and Ke "Eric" Tang, will leave the company.

According to the United States Attorney's Office for the Southern District of New York, KuCoin has pled guilty to operating an unlicensed money-transmitting business in the U.S. and agreed to pay over $297 million in penalties.

Authorities revealed that KuCoin failed to implement required anti-money laundering (AML) measures, facilitating billions of dollars in suspicious transactions.

"KuCoin avoided implementing required anti-money laundering policies designed to identify criminal actors and prevent illicit transactions," U.S. Attorney Danielle R. Sassoon stated.

The exchange reportedly transmitted potentially criminal proceeds linked to darknet markets, ransomware, and fraud schemes.

As part of the plea agreement, KuCoin will exit the U.S. market for at least two years. The company’s founders, Chun "Michael" Gan and Ke "Eric" Tang, will also leave their roles. Additionally, both founders have agreed to forfeit $2.7 million in funds generated from U.S. operations.

KuCoin previously served approximately 1.5 million U.S.-based registered users and earned $184.5 million in fees from them. Despite these operations, the release highlighted that KuCoin employees openly promoted the lack of a Know-Your-Customer (KYC) program. A KYC process was introduced in August 2023 but was not applied retroactively to existing accounts.

In a statement, Gan said his resignation was to ensure KuCoin’s future success, maintaining that he had no intention to violate U.S. or international laws.

Meanwhile, KuCoin’s native token, KCS, rose by 10% on Monday, though trading volume remained low, according to CoinGecko. The implications of KuCoin’s guilty plea may influence broader regulatory scrutiny on the cryptocurrency industry.

Edited by Harshajit Sarmah