On Jan. 28, KuCoin pleaded guilty to a United States judge for failing to implement proper anti-money laundering protocols and will now have to pay $297 million in fines.
The China-based cryptocurrency exchange KuCoin violated U.S. regulations on money laundering and know-your-customer procedures and admitted guilt to one charge of “running an unlicensed money transmitting business.” As per the official statement from the U.S. Attorney’s Office, the entity operating as KuCoin, PEKEN GLOBAL LIMITED, will be required to withdraw from the U.S. market for at least two years and pay a fine of $297 million.
Danielle Sassoon, the U.S. Attorney for the Southern District of New York, said KuCoin had avoided the implementation of standard anti-money laundering policies that would identify criminal actors and prevent illegal transactions for years.
The company processed billions of dollars in suspicious transactions and transmitted potentially ill-gotten gains, including those from the 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,” says Sassoon.
Cointelegraph reported on Mar. 26, 2024, that KuCoin received over $5 billion and transmitted more than $4 billion in what the U.S. government deems as “suspicious and criminal funds.” Up until July of 2024, KuCoin did not require KYC from their customers, going against U.S. compliance measures.
In addition, KuCoin did not register with the U.S. Department of Treasury’s Financial Crimes Enforcement Network, says the press release. Registering with FinCEN provides a framework for crypto companies to be compliant with federal laws and helps reduce risk to both consumers and the larger financial system.
Now, KuCoin’s founders, Chun Gan, and Ke Tang, have stepped down. Chun Gan, who goes by the moniker Michael, announced that he was stepping down from his position as CEO of the crypto exchange “as part of the agreement.” He also mentioned in a blog post that he would now pass the baton to BC Wong.
