Thomas Daniels

Published On: 28/01/2025
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KuCoin logo on a yellow striped background.
By Published On: 28/01/2025

In a significant enforcement action by U.S. regulators, the cryptocurrency exchange KuCoin entered a guilty plea on January 28 to accusations of running an unauthorized money transferring company. The corporation was fined a hefty $297 million and forced to withdraw from the U.S. market for two years after admitting to not putting in place necessary anti-money laundering (AML) safeguards.

The Southern District of New York U.S. Attorney’s Office said that KuCoin, run by PEKEN GLOBAL LIMITED, broke U.S. laws pertaining to money laundering and know-your-customer (KYC) compliance. According to U.S. Attorney Danielle Sassoon, the exchange has enabled questionable transactions totaling billions of dollars that were connected to illegal operations such as ransomware, malware, darknet markets, and fraud schemes.

Because KuCoin disregarded anti-money laundering regulations, criminals were able to take use of the platform and send illicit money. The price of permitting such illegal behavior is shown by this guilty plea, Sassoon stated.

Billions in Questionable Deals
According to the U.S. government, KuCoin transferred more than $4 billion and received more than $5 billion in what it refers to as “suspicious and criminal funds.” According to Cointelegraph reports, KuCoin has been operating without requiring KYC verification from its clients until July 2024, which was a clear violation of U.S. compliance regulations. The business also neglected to register with the Financial Crimes Enforcement Network (FinCEN), which is a crucial step in guaranteeing federal compliance and safeguarding the financial system as a whole as well as consumers.

Changes in Leadership Amid Repercussions
The founders of KuCoin, Chun Gan (also known as Michael) and Ke Tang, have resigned from their positions as leaders in light of the settlement. Chun Gan announced his resignation as CEO in a blog post, citing the agreement with U.S. authorities as the reason. Additionally, he disclosed that BC Wong would take over as the company’s new CEO.

This regulatory action indicates that bitcoin exchanges lacking compliance frameworks are under increased attention from US regulators. KuCoin’s fines and leadership changes are a clear reminder of how crucial it is to follow international regulations in the rapidly changing cryptocurrency sector.

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