Kucoin’s guilty plea exposed billions in illicit transactions, with $297M in penalties and a forced U.S. exit as the DOJ links it to darknet crimes.
Kucoin Guilty Plea: DOJ Uncovers Billions in Suspicious Crypto Transactions
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 admitted to failing to comply with U.S. anti-money laundering (AML) and know-your-customer (KYC) regulations, which aim to prevent criminal activity such as money laundering and terrorist financing. The DOJ revealed:
In connection with today’s guilty plea, Peken agreed to pay monetary penalties totaling more than $297 million.
“Peken further agreed that Kucoin will exit the U.S. market for at least the next two years, and that two of Kucoin’s founders, Chun Gan, a/k/a ‘Michael,’ and Ke Tang, a/k/a ‘Eric,’ who were indicted along with Peken in March 2024, will no longer have any role in Kucoin’s management or operations,” the Justice Department further stated.
U.S. Attorney Danielle Sassoon emphasized the severity of Kucoin’s misconduct, stating: “For years, KuCoin avoided implementing required anti-money laundering policies designed to identify criminal actors and prevent illicit transactions. As a result, KuCoin was used to facilitate billions of dollars’ worth of suspicious transactions and to transmit potentially criminal proceeds, including proceeds from darknet markets and malware, ransomware, and fraud schemes. Today’s guilty plea and penalties show the cost of refusing to follow these laws and allowing unlawful activity to continue.”
Following the announcement by the DOJ, Kucoin shared on social media platform X:
We’re pleased to announce that Kucoin has reached a settlement with U.S. authorities, a major step forward in our journey. This milestone brings clarity to our future and strengthens our commitment to innovation, compliance, and delivering value to our 38M+ users worldwide.
The company also issued an official statement regarding the settlement: “While resolving regulatory challenges in the U.S., we want to reassure our global users that our operations in other non-restrictive markets remain fully unaffected. Kucoin continues to deliver secure and innovative services worldwide, reflecting our dedication to growing as a leading cryptocurrency exchange.”
Despite gaining millions of U.S. customers since its 2017 launch, the DOJ stressed that Kucoin only implemented a mandatory KYC program in August 2023, leaving gaps in compliance for years. The Department of Justice further disclosed:
In addition to the guilty plea, Peken, a Seychelles-based entity, also agreed to criminally forfeit $184.5 million and pay a criminal fine of approximately $112.9 million.
“Additionally, Gan and Tang have each agreed to forfeit approximately $2.7 million in funds received as a result of Kucoin’s operations in the U.S.,” the DOJ noted. The deferred prosecution of Gan and Tang will last two years, during which they will be barred from Kucoin operations.