Hold onto your crypto hats, folks! KuCoin, the crypto exchange hailing from the sunny shores of Seychelles, is taking a temporary break from the US stage. And by “temporary,” we mean at least two years. Why, you ask? Well, they've just confessed to running an unlicensed money-transmitting business. Ouch!
For this little hiccup, KuCoin is coughing up a whopping $297 million. That's right, they're parting with $184.5 million in forfeiture and another $112.9 million in fines. Talk about an expensive lesson! As part of this deal, the dynamic duo behind KuCoin, Michael Gan and Eric Tang, are stepping down and leaving behind $2.7 million in the process.
Since its inception in 2017, KuCoin has climbed the ranks to become a giant in the crypto world, with over 30 million users and a daily trading volume that would make heads spin. It even served around 1.5 million US users, raking in at least $184.5 million from them. However, it seems that somewhere along the way, they missed a memo or two about the Bank Secrecy Act, which is all about keeping things clean and transparent with an anti-money laundering program and know-your-customer checks.
The Department of Justice wasn't too thrilled about KuCoin's lack of a proper KYC program. Up until July 2023, users weren't required to share any identifying information, and KuCoin even boasted on social media that this was optional. Come August 2023, they started enforcing KYC for newbies and those looking to actively trade, but existing users who just wanted to cash out were left unchecked—a big compliance no-no.
KuCoin also skipped registering as a money-transmitting business with FinCEN and didn't bother with those pesky suspicious activity reports. The US Attorney, Danielle R. Sassoon, didn't mince words when she noted that KuCoin had been turning a blind eye to anti-money laundering policies, inadvertently becoming a playground for questionable transactions.
But fear not, KuCoin fans! While they're hitting pause in the US, their operations elsewhere continue to thrive. In a statement, Michael Gan called the settlement a “favorable outcome” and announced a leadership change, with BC Wong stepping in as the new CEO. The Justice Department has even dropped charges against Gan and Tang, leaving KuCoin ready to march forward with newfound clarity. Stay tuned, because the crypto world never sleeps!
