KuCoin, a prominent global cryptocurrency exchange, has reached a settlement, agreeing to pay $22 million to resolve a lawsuit filed by the state of New York as part of ongoing efforts to regulate digital asset firms. The agreement also involves the platform’s decision to block users from New York.
Attorney General Letitia James initiated legal action against KuCoin in March, alleging the Seychelles-based exchange failed to register with the state before facilitating cryptocurrency transactions for investors. “Crypto companies should understand that they must play by the same rules as other financial institutions,” stated James in response to the settlement on Tuesday.
As part of the resolution, KuCoin will cease trading securities and commodities in New York, aligning with increased regulatory scrutiny by US authorities aiming to combat fraud, money laundering, and insufficient investor protections in the cryptocurrency realm.
New York’s Attorney General’s office has recently pursued legal action against several cryptocurrency entities, including Genesis Global, Digital Currency Group, and Gemini, alleging investor fraud amounting to over $1 billion.
While DCG labeled the lawsuit baseless, settlements like the $1.8 million agreement reached in June with Hong Kong-based CoinEx underscore the state’s efforts to enforce compliance through legal means.
KuCoin’s $22 million settlement includes a $5.3 million payment to the state and the refunding of $16.7 million worth of cryptocurrency to approximately 177,800 investors in New York.
Despite its global stature, KuCoin trails behind major exchanges like Binance, Coinbase, and Kraken in various aspects, according to data provided by CoinMarketCap, considering factors such as traffic, liquidity, and trading volumes.
