KuCoin Admits to Violating U.S. Regulations and Reaches Settlement

KuCoin reaches a $297M settlement for violating U.S. AML and KYC regulations, agreeing to exit the U.S. market for two years.

The cryptocurrency exchange KuCoin has admitted to violating U.S. regulations by failing to comply with anti-money laundering (AML) and know-your-customer (KYC) requirements. PEKEN GLOBAL LIMITED, who runs KuCoin, has settled the case, the U.S. Attorney’s Office said. As part of the settlement, KuCoin agreed to pay a $297 million fine and exit the U.S. market for at least two years.

Founded in 2017, KuCoin has become one of the top global cryptocurrency platforms, servicing over 30 million customers worldwide. From 1.5 million users who are registered in the United States, the exchange collected about $184.5 million in fees from 2017 to 2024. Despite its large presence, KuCoin did not reach the U.S. regulatory standards.

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Settlement Reflects U.S. Push for Crypto Regulation Compliance

Users were able to trade cryptocurrencies with Bitcoin or Ethereum as well as some derivative products. This means that until July 2023, KuCoin did not even require customers to provide any identifying information. Even openly on social media, employees stated that KYC procedures were not mandatory. In August 2023, KuCoin introduced KYC rules but only with regards to new users and active traders. Some existing users who wanted to withdraw funds or close accounts were not required to comply.

KuCoin also failed to register with FinCEN as a money transmitting business and in doing so ignored KYC rules. The failure paved the way for billions of dollars in suspicious transactions to be processed in transactions from illegal activity, like fraud, ransomware, darknet market trades and more.

U.S. Attorney Danielle R. Sassoon chastises KuCoin for not having AML policies and allowing criminal transactions to occur. The settlement, she said, sends the message that if you allow illegal things to happen, there is a price.

The settlement is a major step toward holding cryptocurrency platforms to regulatory compliance. The penalties levied against KuCoin serve as a clear warning to other exchanges to follow the laws meant to safeguard the financial system and prevent criminal activity. This is a case about the U.S. government’s commitment to strict standards in the crypto world.

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