Kucoin agreed to a settlement of $300 million, which includes $113 million in penalties, $184.5 million in civil forfeitures.
The cryptocurrency trading platform Kucoin has entered a plea of guilty to charges of operating as an unlicensed money transmitter, as brought forth by the United States Department of Justice (DOJ).
This petition represents the most significant alteration in the litigation, implicating its co-founders, Chun Gan and Ke Tang. As per a recent update from Samuel Rubenfeld, a senior reporter at MLExclusive, the exchange submitted guilty pleas at the United States District Court for the Southern District of New York.
In conjunction with the guilty plea, the co-founders engaged in deferred prosecution agreements with the Department of Justice.
According to the announcement from the United States Attorney’s Office, Peken Global Ltd, one of the entities managing the Kucoin exchange, has engaged in a plea agreement. Subsequent to the agreement, the trading platform consented to remit $300 million to the United States authorities.
This settlement encompasses $113 million in penalties and $184.5 million in civil forfeitures. KuCoin will additionally incur a financial obligation of $22 million in fines and refunds and will discontinue its trading operations in New York.
The deferred prosecution agreements will enable them to circumvent additional legal proceedings. Nevertheless, each individual will relinquish the amount of $2.7 million.
In addition to this penance, both co-founders will resign from their positions within the trading platform. Gan has already communicated the details of his departure, characterizing the arrangement as advantageous.
From now on, Gan and Eric will not participate in any activities at the exchange. In March 2024, the Department of Justice (DOJ) initiated legal proceedings against Kucoin, alleging that the platform facilitated the movement of up to $4 billion in funds associated with criminal activities.
Additionally, the DOJ charged the trading platforms with violating Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. This guilty plea represents one of the prominent concessions that numerous cryptocurrency entities undertake to settle legal disputes with American regulatory authorities.
As previously, Robinhood disbursed $45 million to resolve federal securities infractions with the Securities and Exchange Commission (SEC).
It is important to note that the BitMEX exchange experienced a similar predicament, involving infractions of the Bank Secrecy Act (BSA) in the year 2022.
In addition to the penalties imposed, Arthur Hayes, Samuel Reed, and Benjamin Delo have not engaged in any active capacity at the exchange since that time.
With President Donald Trump now in office, the regulatory landscape for digital currency is undergoing a transformation. Nevertheless, experts have cautioned against the impractical expectations associated with moderated enforcement actions.
Although the designated chairperson of the U.S. Securities and Exchange Commission, Mark Uyeda, is actively implementing reforms, the regulatory authorities may uphold a policy of zero tolerance for violations of the law.
Hester Peirce has constituted a cryptocurrency task force to investigate significant modifications that could potentially enhance the industry. The contributions of this task force, along with insights from the United States Department of Justice and industry stakeholders, will significantly influence the development of the regulatory framework.
