KuCoin Agrees to $22 Million Settlement, Bars New York Users Amid Regulatory Compliance Challenges

KuCoin, a prominent cryptocurrency exchange, has reached a settlement with the State of New York, agreeing to pay $22 million and cease operations for residents of the state. The agreement, filed in the New York Supreme Court on December 12, reveals that KuCoin acknowledged operating a cryptocurrency trading platform without proper registration as a securities or commodities broker-dealer. The exchange also admitted to representing itself as an “exchange” without being registered as such under New York State laws.

As part of the settlement, KuCoin will close the accounts of all New York residents within 120 days and prohibit them from creating new accounts in the future. Furthermore, access to withdrawals will be restricted within 30 days, allowing users an additional 90 days to withdraw their funds.

KuCoin, once recognized for its pro-privacy stance by not enforcing Know Your Customer (KYC) or Anti-Money Laundering (AML) regulations, altered its policy on June 28. The exchange implemented mandatory KYC for all users, blocking deposits from non-verified accounts and ceasing services for these users after July 15. The recent settlement confirmed that some of these affected users were residents of New York.

Notably, KuCoin, boasting a daily trading volume exceeding $1 billion and attracting over 2 million weekly website visits, has undergone significant changes amid regulatory pressures.