The U.S. Department of Justice (DOJ) announced on Monday that Peken Global Ltd., the Seychelles-based operator of cryptocurrency exchange KuCoin, has pleaded guilty to operating an unlicensed money transmitting business. The company agreed to pay monetary penalties totaling more than $297 million and will exit the U.S. market for at least two years.
DOJ Uncovers Billions in Suspicious Transactions
According to the DOJ, KuCoin failed to implement required anti-money laundering (AML) and know-your-customer (KYC) policies until August 2023, leaving gaps in compliance for years. This allowed the platform to process billions of dollars in suspicious transactions, including proceeds from darknet markets, malware, ransomware, and fraud schemes.
U.S. Attorney Danielle Sassoon emphasized: “For years, KuCoin avoided implementing required AML policies, resulting in its use to facilitate billions of dollars of illicit activity. Today’s guilty plea and penalties show the cost of refusing to follow these laws.”
Penalties and Founder Forfeiture
As part of the plea agreement, Peken agreed to criminally forfeit $184.5 million and pay a criminal fine of approximately $112.9 million. Additionally, founders Chun Gan (aka “Michael”) and Ke Tang (aka “Eric”), who were indicted in March 2024, each agreed to forfeit approximately $2.7 million in funds from KuCoin’s U.S. operations. They face a two-year deferred prosecution and are barred from managing or operating KuCoin during that period.
KuCoin Responds: Settlement as a Milestone
KuCoin posted on social media platform X that it reached a settlement with U.S. authorities, calling it “a major step forward” that brings clarity to its future. The company assured its global users that operations in non-restrictive markets remain “fully unaffected” and that it continues to serve over 38 million users worldwide. However, the DOJ noted that KuCoin only implemented mandatory KYC in August 2023 despite gaining millions of U.S. customers since its 2017 launch.
Industry Implications
The KuCoin case marks another significant enforcement action by U.S. regulators against crypto exchanges, following Binance’s $4.3 billion settlement. The DOJ’s actions signal a tightening of AML/KYC requirements, potentially driving more platforms to exit the U.S. market or bolster compliance efforts. Analysts believe this could reshape the regulatory landscape for cryptocurrency exchanges operating in the United States.