TLDR
- KuCoin faces $297 million penalty following DOJ investigation into unlicensed operations
- Exchange served 1.5 million US users without proper licensing or AML controls
- Founders must step down and forfeit $2.7 million each in settlement agreement
- Platform allowed billions in suspicious transactions through lack of KYC until 2023
- Two-year ban from US operations begins immediately under settlement terms
The United States Department of Justice has levied a $297 million penalty against cryptocurrency exchange KuCoin, marking one of the largest enforcement actions in the crypto sector’s history. The announcement came Monday as KuCoin admitted to operating without proper licensing while serving U.S. customers.
Court documents reveal that KuCoin, operating through Seychelles-based company Peken Global Limited, maintained a customer base of roughly 1.5 million U.S. users. These operations generated approximately $184.5 million in fees from American customers alone, all while avoiding required regulatory oversight.
The DOJ’s investigation uncovered that KuCoin had deliberately sidestepped crucial anti-money laundering protocols. U.S. Attorney Danielle R. Sassoon highlighted that this lack of oversight enabled the platform to process billions in suspicious transactions, including funds linked to darknet markets, ransomware attacks, and various fraud schemes.
Under the terms of the settlement, KuCoin must forfeit the $184.5 million earned from U.S. operations and pay an additional criminal fine of $112.9 million. The exchange’s founders, known professionally as Michael Gan and Eric Tang, face personal penalties of $2.7 million each and must step away from their leadership roles.
The investigation exposed a pattern of non-compliance dating back to the exchange’s founding in 2017. KuCoin employees openly advertised the platform’s lack of know-your-customer requirements, treating basic identity verification as optional even for U.S.-based customers.
It wasn’t until August 2023 that KuCoin implemented any form of KYC process, and even then, existing customers could continue trading and withdrawing funds without meeting these new requirements. The exchange never submitted suspicious activity reports as required by U.S. financial regulations.
The settlement mandates KuCoin’s complete withdrawal from the U.S. market for a minimum of two years. During this period, the exchange must actively prevent American users from accessing its services and implement comprehensive compliance programs.
BC Wong, KuCoin’s newly appointed CEO, has taken over leadership following the founders’ departure. Wong addressed the settlement on social media, emphasizing the exchange’s commitment to regulatory compliance while maintaining its focus on innovation.
Market reaction to the settlement news showed unexpected resilience. KuCoin’s native token, KCS, experienced a 10-13.7% increase in value following the announcement, though trading volumes remained relatively low. The broader crypto market maintained stability, with Bitcoin trading around $102,700.

The penalty breakdown includes the forfeiture of all U.S.-generated revenue, totaling $184.5 million, plus the additional criminal fine bringing the total to nearly $300 million. This represents one of the most substantial penalties ever imposed on a crypto exchange for regulatory violations.
The DOJ’s action requires KuCoin to implement strict new compliance measures, including enhanced user screening procedures and comprehensive transaction monitoring systems. Regular audits will ensure adherence to these new protocols.
The exchange has begun notifying its U.S. user base about the impending closure of their accounts. Users must withdraw their assets before the platform implements its mandatory U.S. access restrictions.
Founded in 2017, KuCoin grew to become one of the largest cryptocurrency exchanges globally before attracting regulatory scrutiny. The platform’s rapid expansion occurred without establishing proper licensing and compliance frameworks.
The settlement also addresses the exchange’s role in facilitating suspicious transactions. Prosecutors detailed how the lack of proper verification procedures allowed potentially criminal proceeds to flow through the platform unchecked.
The two-year ban specifically prohibits any involvement from former founders Gan and Tang in the exchange’s operations, marking a complete break from the previous management structure that oversaw the period of non-compliance.
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