The settlement includes substantial financial penalties with executives agreeing to individual forfeitures, highlighting increased scrutiny of offshore exchanges.
The pattern of regulatory challenges spans multiple jurisdictions, including previous restrictions in New York, Canada, and temporary limitations in India.
The timing coincides with broader crypto enforcement actions, though potential policy shifts loom under the new Trump administration’s pro-crypto stance.
Leading global cryptocurrency exchange Kraken has once again hit a roadblock in the United States, regarding its operations in the country. According to a Bloomberg on Monday, the company pleaded guilty to operating an unlicensed money-transmitting business, agreeing to nearly $300 million in fines and forfeitures.
The case in March 2024 when the United States Department of Justice (DOJ) officially brought a legal action against the company and two of its executives. According to the official announcement at the time, both co-founders, Chun Gan and Ke Tang, allegedly conspired to operate without proper licensing and failing to implement anti-money laundering (AML) measures on the exchange.
KuCoin Admits Regulatory Violations
After nearly a year of deliberations, KuCoin has decided to settle the case in court. On Monday, January 27, Peken Global Ltd., one of the three entities collectively registered as KuCoin entered a guilty plea before the US District Judge Andrew Carter in Manhattan.
Under the plea agreement, the company has been mandated to pay a $113 million fine and forfeit $184.5 million. Additionally, its two executives signed deferred prosecution agreements and agreed to forfeit around $2.7 million each.
Meanwhile, this is not KuCoin’s first regulatory clash in the United States. In December 2023, the exchange a $22 million settlement with New York authorities, which required it to cease operations in the state after being accused of misrepresenting itself as a licensed crypto exchange and failing to register as a securities and commodities broker-dealer.
Beyond the United States, the company had also faced regulatory hurdles in other jurisdictions, such as Canada. In 2022, the Canadian financial regulator, the Ontario Securities Commission (OSC) banned the exchange from servicing users in the country due to failure to meet securities law requirements in the country.
Last year, KuCoin also faced regulatory problems in India. The company was among several crypto exchanges, including Binance, that were from accessing the Indian market for lack of compliance.
However, after months of sitting on the sidelines, financial authorities decided to lift the ban, granting the exchange legal entrance into the country.
A Broader Pattern of Crypto Crackdowns
Meanwhile, for its latest regulatory challenges in the United States, the company is not the only crypto firm facing legal repercussions for failing to meet US regulatory standards.
Earlier this month, BitMEX, another Seychelles-based exchange, was to pay $100 million in fines for violating US anti-money laundering laws. The platform pleaded guilty to breaking the Bank Secrecy Act, which mandates strict compliance measures such as identity verification and monitoring for illicit financial activities.
The crackdown on KuCoin and BitMEX reflects the American government’s intensified scrutiny of offshore crypto exchanges. However, the future of such enforcement remains uncertain. With the recent of President Donald Trump, who has expressed a more lenient stance toward the crypto industry, regulatory oversight could shift in the coming months.
