KuCoin Fined $300 Million For AML/KYC Failures

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• KuCoin has pleaded guilty to operating an unlicensed money-transmitting business
• The company has agreed to pay penalties totaling nearly $300 million
• KuCoin will exit the U.S. market for at least two years, and its founders will step down from management roles

Crypto exchange KuCoin has admitted to operating without proper licensing and has agreed to pay over $297 million in fines and forfeitures. As part of the settlement, the company will cease operations in the United States for a minimum of two years, while co-founders Chun “Michael” Gan and Ke “Eric” Tang will resign from their positions and forfeit $2.7 million each. KuCoin has now added its name to the list of crypto exchanges that launched in 2017 with no oversight and are now paying the price.

Born in the Wild West

Founded during the Wild West of crypto in 2017, KuCoin rapidly expanded to serve over 30 million users worldwide, facilitating billions of dollars in daily cryptocurrency transactions. However, the U.S. Department of Justice found that the Seychelles-based exchange failed to implement effective anti-money laundering (AML) and know-your-customer (KYC) programs, as required by U.S. law.

This negligence allowed the platform to be used for violating the Bank Secrecy Act, transmitting potentially illicit funds, including proceeds from darknet markets and various fraud schemes, according to US Attorney Danielle R. Sassoon:

For years, KuCoin avoided implementing required anti-money laundering policies designed to identify criminal actors and prevent illicit transactions. As a result, KuCoin was used to facilitate billions of dollars’ worth of suspicious transactions and to transmit potentially criminal proceeds, including proceeds from darknet markets and malware, ransomware, and fraud schemes.

Lack of Oversight Catches Up With KuCoin

In a plea agreement announced on January 27, 2025, KuCoin admitted to operating an unlicensed money-transmitting business. The settlement includes a $112.9 million criminal fine and a $184.5 million forfeiture, totaling more than $297 million in penalties. The company has also agreed to exit the U.S. market for at least two years.

Co-founders Gan and Tang have entered into two-year deferred prosecution agreements, each agreeing to forfeit $2.7 million and step down from any managerial roles within the company. The total is a far cry from the $4.3 billion settlement agreed with Binance over similar offences.

Following the settlement, KuCoin has appointed its chief legal officer, B.C. Wong, as the new CEO. Wong expressed the company’s commitment to compliance and future growth, stating, “We anticipate this resolution will mark a pivotal moment for KuCoin, paving the way for clarity and closure. While the settlement addresses past compliance gaps, it would allow us to move forward … .” The company plans to enhance its compliance practices and explore opportunities to re-enter the US in the future once it has attained the necessary licenses.