KuCoin Hit with Huge Fine

Peken Global Ltd., registered in Seychelles and affiliated with the KuCoin exchange, pleaded guilty in Manhattan federal court, according to the U.S. Department of Justice. The court ordered the company to pay $113 million in fines and forfeit $184.5 million in assets as part of a settlement with prosecutors.

The roots of this case trace back to December 2023, when KuCoin agreed to a $22 million settlement with the New York Attorney General. The deal resolved claims that KuCoin had failed to register as a securities and commodities broker-dealer. As part of the settlement, the platform also agreed to halt its trading activities in New York. Despite paying the penalties, KuCoin kept its operations running.

March 2024 saw KuCoin and its founders, Chun Gan and Ke Tang, charged with conspiring to operate an unregulated money transfer business and neglecting to enforce an anti-money laundering program. As part of their deferred prosecution agreements, both founders agreed to pay fines of around $2.7 million each and permanently step down from managing the company.

Meanwhile, the U.S. Commodity Futures Trading Commission (CFTC) filed a separate lawsuit against KuCoin in the same month. The CFTC accused the exchange of illegal transactions involving over-the-counter commodity futures contracts and offering leveraged retail commodity trading without proper registration. With the lawsuit still pending, the total financial penalties KuCoin faces could rise significantly.

This case serves as a clear example of how U.S. regulators are stepping up their enforcement of anti-money laundering laws and investor protection measures within the cryptocurrency space. KuCoin has expressed its intent to improve compliance standards and may consider a licensed comeback to the U.S. market down the line.

Explore more in the article: The KuCoin Case — A Prelude to Major Cleanups?