December 13, 2023

KuCoin Resolves $22M Settlement with New York AG, Plans to Exit the State

KuCoin CEO Johnny Lyu emphasizes the exchange's commitment to compliance as it agrees to a $22 million settlement with the New York Attorney General's office, leading to the decision to depart from the New York market.

In a move signaling adherence to regulatory standards, KuCoin has decided to exit the New York market, reaching a $22 million settlement with the New York Attorney General's office. CEO Johnny Lyu expressed the significance of the settlement in highlighting the exchange's dedication to operating in compliance with regulations.

As part of the settlement terms, KuCoin will allocate $16.7 million to refund approximately 150,000 New York-based customers, while an additional $5 million will be directly contributed to the state. The decision comes in response to allegations made by Attorney General Letitia James in March, accusing the Seychelles-based crypto exchange of failing to register before facilitating crypto transactions on its platform.

The lawsuit contended that KuCoin should have completed registration before offering trading services for assets such as ether. The Attorney General's office emphasized the potential risks posed by unregistered offshore crypto platforms to investors, consumers, and the broader economy.

The press release from the New York AG's office revealed that the regulator was able to create an account on KuCoin's platform and engage in buying and selling various cryptocurrencies, including popular tokens like ETH. This raised concerns as New York law mandates registration for securities and commodities brokers operating in the state.

In response to the settlement, KuCoin CEO Johnny Lyu assured affected users in New York that they would receive communication, either through email or text, within the next 10 days. Lyu also urged users to rely on the official KuCoin website for accurate information and cautioned against potential rumors circulating in the coming weeks.

The resolution with the New York AG follows a trend of increased scrutiny and legal action against crypto companies by regulatory authorities. Notably, the U.S. Department of Justice recently announced a multi-billion dollar settlement with Binance and its former CEO, Changpeng Zhao. The New York AG's office has been proactive in pursuing legal action, as seen in previous suits against Digital Currency Group, Gemini, Genesis, and CoinEx, underscoring the regulator's commitment to enforcing state laws related to the crypto industry.

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