KuCoin Fined $297 Million, to Withdraw from US Market Amid AML Compliance Issues

KuCoin, a China-based cryptocurrency exchange, has pleaded guilty to violating US regulations on money laundering and know-your-customer procedures. As a result, the exchange will pay a fine of $297 million and withdraw from the US market for at least two years.

Failure to Implement AML Protocols

According to the US Attorney’s Office, KuCoin failed to implement proper anti-money laundering protocols, allowing billions of dollars in suspicious transactions to be processed. The company’s failure to comply with US regulations enabled the transmission of potentially ill-gotten gains, including those from darknet markets, malware, ransomware, and fraud schemes.

“Today’s guilty plea and penalties show the cost of refusing to follow these laws and allowing unlawful activity to continue,” said Danielle Sassoon, US Attorney for the Southern District of New York.

Unregistered and Uncompliant

KuCoin did not require know-your-customer (KYC) information from its customers until July 2024, violating US compliance measures. Additionally, the exchange failed to register with the US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), which provides a framework for crypto companies to comply with federal laws and reduce risk to consumers and the financial system.

Stepping Down and Passing the Baton

KuCoin’s founders, Chun Gan and Ke Tang, have stepped down, with Chun Gan announcing his resignation as CEO “as part of the agreement.” BC Wong will take over as CEO, with Gan expressing his gratitude for the trust and strong foundation he built for KuCoin.

Key Takeaways:

  • KuCoin pleaded guilty to violating US regulations on money laundering and know-your-customer procedures.
  • The exchange will pay a fine of $297 million and withdraw from the US market for at least two years.
  • KuCoin failed to implement proper anti-money laundering protocols, allowing billions of dollars in suspicious transactions to be processed.
  • The company did not require KYC information from its customers until July 2024 and failed to register with FinCEN.

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