KuCoin Pleads Guilty: $297M Settlement and Management Changes in U.S. Crypto Crackdown!

Ben
Tue, 28 Jan 2025 13:44:23 +0000
Crypto Schemes, FinCEN, Money Laundering, ticker, United States, BC Wong, Chun Gan, Ke Tang, KuCoin, Peken Global

Seychelles-based KuCoin, one of the largest crypto exchanges globally, pleaded guilty in the U.S. to operating an unlicensed money transmitting business and agreed to pay $297 million in fines and forfeitures. The settlement highlights failures in anti-money laundering (AML) and compliance practices, forcing KuCoin to exit the U.S. market for two years.

Key Points:

The Charges: KuCoin admitted to running an unlicensed money transmitting business and failing to implement effective AML and KYC programs.

The Penalties: The settlement includes a $112.9 million criminal fine, $184.5 million in forfeitures, and a two-year ban from the U.S. market.

Management Changes: Founders Chun Gan (Michael) and Ke Tang (Eric) entered two-year deferred prosecution agreements, forfeiting $2.7 million each and stepping down from KuCoin’s management.

Allegations: U.S. authorities accused KuCoin of facilitating billions in suspicious transactions, including proceeds from ransomware, fraud, and darknet markets.

Compliance Commitment: Newly appointed CEO BC Wong pledged to strengthen compliance measures and potentially reenter the U.S. market with proper licensing.

Short Narrative:

Seychelles-based PEKEN GLOBAL LIMITED d/b/a KuCoin, a major player in the crypto world with over 30 million users, has admitted to serious compliance failures in the U.S. In a landmark plea agreement, the exchange agreed to pay nearly $300 million in fines and forfeitures for facilitating illicit transactions and failing to comply with regulatory standards. As part of the deal, KuCoin will exit the U.S. market for at least two years, while its founders face personal penalties and deferred prosecution agreements.

U.S. Attorney Danielle R. Sassoon: “For years, KuCoin avoided implementing required anti-money laundering policies designed to identify criminal actors and prevent illicit transactions. As a result, KuCoin was used to facilitate billions of dollars’ worth of suspicious transactions and to transmit potentially criminal proceeds, including proceeds from darknet markets and malware, ransomware, and fraud schemes.

This case follows a similar $22 million settlement with New York State in 2023, reflecting increasing regulatory scrutiny on cryptocurrency exchanges. KuCoin’s leadership has promised to overhaul compliance measures to avoid further violations and rebuild its reputation.

Actionable Insight:

This settlement underscores the critical importance of robust compliance programs for cryptocurrency exchanges operating globally. Exchanges must prioritize AML and KYC measures to mitigate risks of facilitating criminal activity and avoid severe penalties.

Call for Information:

Do you have information about compliance failures in the crypto industry? Share it anonymously via Whistle42.com and contribute to exposing regulatory gaps and enhancing industry integrity!