KuCoin, a major player in the cryptocurrency exchange sphere, has opted to cease operations for users in New York and shell out $22 million to settle a lawsuit initiated by the state in its efforts to regulate digital asset enterprises.
New York Attorney General Letitia James filed a lawsuit against KuCoin in March, alleging the Seychelles-based platform allowed investors to trade cryptocurrencies on its platform without registering with the state.
In her statement on Tuesday, James emphasized the need for crypto entities to adhere to the same standards as traditional financial institutions, stating, “Crypto companies should understand that they must play by the same rules as other financial institutions.”
The settlement entails KuCoin discontinuing securities and commodities trading in New York. This resolution aligns with the intensified crackdown by U.S. regulators and law enforcement agencies targeting fraud, money laundering, and inadequate investor safeguards within the cryptocurrency realm.
Earlier actions by James’ office include lawsuits against Genesis Global, its parent company Digitial Currency Group, and Gemini for allegedly defrauding investors of over $1 billion. DCG refuted these claims as baseless. Additionally, a June settlement saw her office fining Hong Kong-based exchange CoinEx $1.8 million for unauthorized operations in the state.
Recent legal actions have impacted figures within the cryptocurrency sphere, with FTX founder Sam Bankman-Fried convicted on federal charges related to embezzlement from customers, and Binance’s founder agreeing to plead guilty to violating U.S. anti-money laundering laws.
KuCoin’s $22 million settlement involves a $5.3 million payment to the state and the reimbursement of $16.7 million in cryptocurrency to 177,800 New York investors.
While KuCoin trails behind Binance, Coinbase, and Kraken among cryptocurrency spot exchanges in factors like traffic, liquidity, and trading volumes, as per CoinMarketCap data, its resolution signifies a pivotal step in adhering to regulatory guidelines.
