KuCoin Closes Operations in New York, Settles $22 Million Lawsuit
KuCoin settles with New York, discontinues operations, and pays $22 million. Learn about the resolution and its impact on the crypto exchange industry.
KuCoin, a major global cryptocurrency exchange, has chosen to settle a legal matter with the state of New York. The resolution involves KuCoin blocking access for users in New York and agreeing to make a significant payment of $22 million. The lawsuit, initially filed in March by Attorney General Letitia James, claimed that KuCoin allowed investors to engage in cryptocurrency trading without proper registration in the state.
Crypto exchange KuCoin to shut in New York, pay $22 million to settle lawsuit https://t.co/CpxHWV3Zzg pic.twitter.com/MX8eFCnp3a — Reuters Tech News (@ReutersTech) December 12, 2023
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Attorney General James stressed the importance of cryptocurrency companies following the same regulatory standards as traditional financial institutions. This settlement comes amid increased regulatory scrutiny, with U.S. authorities intensifying efforts to combat fraud, money laundering, and ensure adequate investor protection in the cryptocurrency space.
As part of the agreement, KuCoin will also stop trading securities and commodities within the state of New York. This decision aligns with broader regulatory trends seeking to bring digital asset companies in line with existing financial regulations.
Recent months have seen increased legal actions by the New York Attorney General's office against various cryptocurrency firms, including Genesis Global, Digital Currency Group (DCG), and Gemini, on charges of fraud and other violations. Notably, the cryptocurrency exchange CoinEx settled with the state for $1.8 million in June for operating without proper registration.
The $22 million settlement from KuCoin includes a $5.3 million fine to the state. Additionally, KuCoin commits to refunding $16.7 million worth of cryptocurrency to approximately 177,800 investors in New York. Despite being a significant player in the cryptocurrency landscape, KuCoin lags behind exchanges like Binance, Coinbase, and Kraken in terms of factors such as traffic, liquidity, and trading volumes, according to data from CoinMarketCap.
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