KuCoin is set to pay about $300 million in settlement with the United States after pleading guilty to operating without a proper license in the country. According to a statement by the Department of Justice on Monday, PEKEN Global Limited which operates as KuCoin pleaded guilty to the charges before a Manhattan federal court.
As part of the deal, the DOJ said the exchange would forfeit $184.5 million and pay $112.9 million as a fine. Also, the statement confirmed that KuCoin will exit the US market, and the founders of the exchange, Michael Gan and Eric Tang will have to relinquish authority to a new management team.
Consequently, KuCoin’s chief legal officer, BC Wong will now step up as the new CEO of the cryptocurrency exchange. Furthermore, the DOJ explained how the two founders failed to implement good Anti-Money Laundering and Know Your Customer initiatives.
The Department of Justice established that the exchange didn’t mandate users to provide means of identification until July 2024. Providing more insight, the statement illustrated that employees of KuCoin, across various social media platforms told users that KYC isn’t important on the exchange.
Their responses also extended to users who identified themselves as customers living in the US. Recall that in March 2024, US prosecutors accessed Gan and Tang for refusing to implement Anti-Money Laundering and Know Your Customer measures.
How KuCoin Responded
Meanwhile, KuCoin through an official blog post has reacted to the fine. The exchange describes the penalty as a resolution that brings “clarity and closure to past issues.” Further, KuCoin said the resolution underlines its commitment to “acting responsibly and operating with high compliance standards.
The cryptocurrency exchange went on to downplay any negative impact on its operation in other jurisdictions after reaching the agreement. KuCoin quickly established that after resolving regulatory issues in the US, its operations in other markets will remain intact.
Likewise, the crypto trading platform echoed how it has focused on compliance and security in the last two years. Some of these efforts according to KuCoin include expanding its legal team, adopting industry-leading security measures, and receiving key regulatory approval.
In a separate statement, the outgoing CEO, Gan revealed that as part of the resolution, the DOJ has dropped all charges against him and Tang. While thanking the Justice Department for its constructive approach, Gan added that the resolution is a clarity that will pave a clear path for the exchange.