TL;DR
- 300 million in fines/forfeitures. Its operator, Peken Global, must exit the U.S. market for two years, cutting off 1.5 million American users. Founders forfeit $2.7M each and are barred from operations.
- Compliance Failures Fueled Illicit Activity: The DOJ found KuCoin evaded AML/KYC rules for years, enabling billions in suspicious transactions tied to darknet markets and fraud.
- Leadership Overhaul & Reforms: New CEO BC Wong replaced ousted founders, pledging stricter compliance. KuCoin has implemented enhanced KYC checks and audits to prevent misuse while serving 30 million non-U.S. users.
Crypto exchange KuCoin has pleaded guilty to operating an unlicensed money-transmitting business in the United States, agreeing to pay nearly $300 million in fines and forfeitures as part of a settlement with the U.S. Department of Justice. The resolution, announced on January 28, marks one of the largest penalties ever imposed on a crypto platform for regulatory failures.
Under the terms of the agreement, KuCoin’s operator, Seychelles-based Peken Global Limited, will forfeit $184.5 million and pay a $112.9 million criminal fine. The crypto exchange must also exit the U.S. market for at least two years, ceasing services to its estimated 1.5 million American users.
Founders Chun Gan and Ke Tang, who stepped down as part of the settlement, will each forfeit $2.7 million and are barred from participating in the company’s operations during the suspension period.
Systemic Compliance Failures and Illicit Activity
The DOJ investigation revealed that KuCoin deliberately evaded U.S. anti-money laundering and know-your-customer regulations for years. Until August 2023, the platform allowed users to trade without identity verification, enabling billions in suspicious transactions linked to darknet markets, ransomware, and fraud schemes.
U.S. Attorney Danielle R. Sassoon emphasized that KuCoin “failed to implement even basic AML policies,” becoming a haven for illicit financial flows. Prosecutors noted that KuCoin never registered with the Financial Crimes Enforcement Network or filed mandatory suspicious activity reports, despite generating $184.5 million in fees from U.S. customers alone.
Leadership Overhaul and Compliance Reforms
The indictment also accused founders Gan and Tang of concealing the platform’s substantial U.S. user base to avoid regulatory scrutiny. As part of the settlement, KuCoin appointed BC Wong as its new CEO, replacing the ousted founders.
Wong, formerly the company’s Chief Legal Officer, pledged to prioritize compliance and rebuild trust. “This resolution signifies a new chapter for KuCoin,” he stated, highlighting plans to strengthen global operations and eventually reenter the U.S. market with proper licensing.
The exchange has already implemented stricter KYC protocols and will undergo regular audits to ensure adherence to U.S. financial laws. These measures aim to prevent future misuse of the platform while maintaining services for its 30 million non-U.S. users.
