KuCoin Cryptocurrency Exchange Admits to Operating Without a License
In a significant legal development, KuCoin, a prominent cryptocurrency exchange, has admitted to functioning as an unlicensed money transmitting service. This acknowledgment was highlighted in a report by Bloomberg, shedding light on the exchange’s legal challenges.
Substantial Financial Penalties Agreed by KuCoin
The admission came before U.S. District Judge Andrew Carter in Manhattan, who levied a considerable financial penalty against KuCoin. The exchange has consented to pay close to $300 million in fines and forfeitures. This amount includes a fine of roughly $113 million alongside forfeitures amounting to $184.5 million. This resolution is part of a criminal case that follows a series of civil claims KuCoin settled in New York over a year ago.
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Throughout 2023, KuCoin encountered intense regulatory scrutiny, culminating in a settlement that necessitated the barring of New York users from its platform. Furthermore, as part of the agreement, KuCoin paid $22 million to resolve a lawsuit filed by the state. The lawsuit charged KuCoin with failing to register before enabling investors to trade digital currencies.
Deferred Prosecution Agreements for KuCoin Founders
Adding another layer to this intricate case, two co-founders of KuCoin have entered into deferred prosecution agreements with the U.S. Department of Justice (DOJ). These agreements typically offer individuals the chance to avoid prosecution by adhering to specific conditions set by the government. This move suggests a potential avenue for the founders to alleviate legal consequences.
This incident underscores the escalating regulatory oversight facing cryptocurrency exchanges within the United States. However, with the onset of President Donald Trump’s second term, these regulatory pressures are expected to diminish significantly. The current 47th President of the United States has expressed a commitment to fostering a more transparent and pro-cryptocurrency regulatory framework, with plans to establish a strategic digital asset reserve.
In response to the unfolding news, KuCoin’s native token, KCS, has experienced a decline. As of this writing, KCS has decreased by 4%, settling at its current trading price of $12.80.
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