PEKEN Global Limited, operating as KuCoin, has admitted guilt in a landmark case involving unlicensed money-transmitting activities. The cryptocurrency exchange has agreed to pay nearly $300 million in a settlement with the U.S. Department of Justice (DOJ). This resolution also mandates the resignation of its founders, Michael Gan and Eric Tang, from all roles within KuCoin.
Announced on January 27, the Manhattan federal court settlement includes a $184.5 million forfeiture and a $112.9 million fine. As part of the deal, KuCoin will suspend operations in the U.S. for two years. Gan and Tang will forfeit an additional $2.7 million and relinquish all management roles in the company under a deferred prosecution agreement.
The DOJ had accused KuCoin and its leadership of operating without effective Anti-Money Laundering (AML) and Know Your Customer (KYC) programs. According to prosecutors, the exchange failed to require identifying information from users until mid-2023. KuCoin’s public claims of optional KYC processes further implicated the company.
In addition, KuCoin faced charges for failing to register with the U.S. Department of Treasury’s Financial Crimes Enforcement Network, further violating U.S. financial regulations.
Despite the significant penalties, KuCoin insists that its operations outside the U.S. remain unaffected. In a blog post on January 28, the exchange emphasized its ongoing efforts to strengthen compliance and platform security. Chief Legal Officer BC Wong will assume the CEO role, following Gan’s resignation.
In a statement, Gan expressed relief over the resolution, calling it a “favorable outcome” that offers clarity for KuCoin’s future. He maintained that neither he nor Tang intended to violate U.S. laws or engage in criminal activities.
This case highlights growing regulatory scrutiny of the crypto sector. Earlier this month, BitMEX faced similar consequences, paying $100 million for AML violations. U.S. regulators reported collecting over $19 billion in settlements from cryptocurrency companies by October 2024, signaling an intensified crackdown on unregulated crypto activities.
As KuCoin exits the U.S., its case serves as a cautionary tale for exchanges operating in regulatory gray areas.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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