KuCoin‘s operator, PEKEN Global Limited, has pleaded guilty to operating an unlicensed money transmitting business and will pay $297 million in penalties to settle charges brought by the U.S. Department of Justice (DOJ).
The cryptocurrency exchange failed to implement necessary anti-money laundering (AML) measures, allowing cybercriminals to launder illicit funds through the platform.
According to the DOJ, KuCoin did not enforce “know your customer” (KYC) verification as required by U.S. law and misled users into believing that such compliance was unnecessary. While the exchange finally introduced a KYC system in August 2023, existing customers were still able to withdraw funds without verification. U.S. Attorney Danielle R. Sassoon stated that KuCoin’s negligence enabled billions of dollars in suspicious transactions, including proceeds from darknet markets, ransomware, and fraud schemes.
As part of the settlement, KuCoin will exit the U.S. market for two years, and its founders, Chun Gan (“Michael”) and Ke Tang (“Eric”), will step down from the company’s management. The penalty was determined based on KuCoin’s $184.5 million U.S. earnings from 2017 to 2024, along with a $112.9 million criminal fine. Additionally, Gan and Tang will forfeit $2.7 million earned from U.S. operations.
KuCoin, one of the world’s largest crypto exchanges, has been serving 1.5 million U.S. users since 2017. The case highlights ongoing regulatory scrutiny over cryptocurrency platforms that fail to comply with financial laws designed to combat fraud and illicit transactions.
