On Monday, KuCoin, a cryptocurrency exchange, entered into a plea of guilty to operating an unlicensed money transmitting business.
KuCoin is obligated to forfeit $184.5 million and pay a criminal sanction of $112.9 million as part of the plea agreement.
Additionally, it requires KuCoin to withdraw from the US market for a minimum of two years. Furthermore, Chun Gan (“Michael”) and Ke Tang (“Eric”), two of KuCoin’s founders who were indicted with Peken in March 2024, are required to relinquish their management and operational responsibilities at the company.
Additionally, Gan and Tang have consented to forfeit approximately $2.7 million each, which is equivalent to the revenue they generated from KuCoin’s operations in the United States.
The US Department of Justice (DOJ) accused KuCoin of intentionally violating US anti-money laundering regulations. It stated that the company did not implement sufficient anti-money laundering (AML) and know-your-customer (KYC) programs, which are intended to prevent terrorist financing and money laundering. Additionally, KuCoin neglected to report suspicious transactions and neglected to register with the Financial Crimes Enforcement Network, it asserted.
The prosecutors disclosed that KuCoin, which is based in the Seychelles, knowingly facilitated billions of dollars in suspicious transactions. This included the transmission of potential illicit proceeds from activities such as darknet markets, malware, ransomware, and fraud.
KuCoin agreed to pay $22 million in penalties and restitution in December 2023 to resolve claims brought by the New York state attorney general. The company also agreed to discontinue trading in New York as part of the settlement, following allegations that it fraudulently promoted itself as a crypto exchange and operated without proper registration as a securities and commodities broker-dealer.
According to court filings, KuCoin had reported that by March 2024, it had amassed more than 30 million registered users in at least 207 countries and territories since its establishment in 2017.
Earlier this month, a federal magistrate in Manhattan imposed a $100 million sanction on BitMEX, determining that the exchange had “willfully failed” to implement US anti-money laundering (AML) measures, thereby violating the Bank Secrecy Act. According to the Justice Department, the organization did not adhere to anti-money laundering regulations in order to augment its revenue.
Some of the concluding outcomes of the Justice Department’s extensive assault on crypto exchanges during Joe Biden’s presidency are the cases against KuCoin and BitMEX. Nevertheless, these actions signal the conclusion of a significant chapter in regulatory enforcement, as President Donald Trump has pledged to decrease government supervision of the crypto market following his recent inauguration.
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